THE  LIBRARY 

OF 

THE  UNIVERSITY 
OF  CALIFORNIA 

LOS  ANGELES 

SCHOOL  OF  LAW 


A    SUMMARY 


Contracts  to  Sell  and  Sales 


PERSONAL  PROPERTY 

At  Common.  Law 

( VUh  references  to  the  Uniform  Sales  Act) 


FRANK  A.  ERWIN 

Professor  of  Law,  New  York  University 


NEW  YORK  UNIVERSITY   PRESS 

BOOK    STORE 

81  Washington  Square  East 

New  York  City 


COPTBIOHT,  1911 

mt 

FRANK  A.  EKWI» 


T 

s 


PRINTED  AND  BOUND  BY 

J.    B.    LYON    COMPANY 

ALBANY,  N.  Y. 


CONTENTS. 


PART  I. 
Essentials  and  Distinctions.  PAGE. 

Definitions 

Sales  and  contracts  to  sell:  distinguished 

Sale:  Roman  law 

Sales:  absolute  and  conditional 

Vo'untary  and  involuntary 

Subject-matter:  in  general 

Existing  and  future  goods 

Existence  of  subject-matter:  sale 

Existence  of  subject-matter:  sale,  Roman  law 

Continued  existence  of  subject-matter:  contract  to  sell 

Future  goods:  potential  existence,  sale 

Sale  in  equity 

Contract  to  sell 

Price:  in  general 

Fixing  the  price 

Reasonable 

Essential  elements 

Exchange 

Sale  and  exchange,  distinction  between,  material  when 23 

Roman  law 23 

Bailment 24 

Pledge 25 

Consignment 25 

Bailment  with  privilege  of  purchase 26 

Sale  or  return 27 

Option  must  be  exercised  when 27 

Lease 28 

Mortgage  of  goods 30 

Contract  for  work  and  labor 31 

Roman  law 31 

Gift:  defined 32 

Essential  elements 32 

Delivery,  history  of 33 

Equitable  title 34 

Revocable  and  irrevocable,  when 36 

PART  II. 

The  Transfer  of  Title. 
Introductory 37 

As  between  the  parties : 

Sale  and  contract  to  sell 37 

Intention  of  parties,  the  test 39 

[in] 


Q&72G2 


iv  CONTENTS. 

As  between  the  parties  —  Continued :  PACI- 
Rules  for  ascertaining  intention: 

I.  Sale  of  specific  goods,  nothing  remaining  to  be  done 41 

II.  Goods  to  be  put  into  deliverable  state 43 

III.  Price  to  be  ascertained  by  weighing,  measuring,  or  testing.  45 

IV.  (1)  "  Sale  or  return." 49 

(2)  "  Sale  on  approval  " 49 

V.  Sale  by  description:  appropriation 51 

Delivery  to  carrier 51 

C.  O.  D.  shipment 56 

Quantity  shipped  must  conform  to  order 57 

Order  calling  for  "  more  or  less  " 58 

Reservation  of  right  of  disposal 59 

Reservation  by  bill  of  lading 59 

As  to  third  persons : 

Nemo  dot  quod  non  habet 62 

Exceptions:  Sales  in  markets  overt 62 

Negotiable  paper 64 

Transfer  of  title  by  consent  of  owner 65 

Bona  fide  purchaser  from  fraudulent  vendee 65 

Possession  intrusted  to  one  whose  common  business  it  is  to 

sell 67 

Who  is  a  bona  fide  purchaser  for  value 68 

Remedies  of  defrauded  vendor 71 

Fraud  by  impersonation 71 

Bona  fide  purchaser  from  conditional  vendee 75 

PART  III. 

Warranty. 

Defined 78 

Development  of  warranty 78 

Misuse  of  word  "  warranty  " 80 

Condition  and  warranty 81 

Representation  and  warranty 82 

Classification  of  warranties 84 

Express  warranty:  defined 84 

Word  "  warrant  "  unnecessary 85 

Intention  of  seller  to  warrant 85 

Warranty  against  obvious  defects 87 

Warranty:  consideration  for 88 

Written  contract  excludes  oral  warranty 88 

Written  contract  does  not  exclude  implied  warranty 89 

Express  warranty  excluding  implied  warranty 90 

Implied  warranty:  denned 91 

Early  English  law 91 

Classification 93 

Implied  warranty  of  title 94 

Same:  seller  in  or  not  in  possession 95 

Same:  Sale  of  Goods  Act 96 

Implied  warranty  of  quality:  early  law 97 

Implied  warranties  and  caveat  emptor 99 

Sale  of  specific  chattel  open  to  inspection 101 

Executory  and  executed  agreements:  merchantability 102 


CONTENTS.  v 

Classification  of  warranties  — Continued.  PACE. 

Same:  fitness  for  special  use 103 

Implied  warranty  against  latent  defect:  manufacturer 104 

Same:  dealer 106 

Implied  warranty:  sale  by  sample 105 

Same:  sale  by  description 108 

Same:  food  products 109 

Breach  of  warranty:  remedy  for 112 

Warranty  not  available  to  sub-purchaser 115 

PART  IV. 

Statute  of  Frauds. 

Introduction 117 

English  statute  (original) 117 

New  York  statute  (now  repealed) 118 

Uniform  Sales  Act 118 

Sales  and  contracts  to  sell 118 

Exchange 119 

Pleading  the  statute  as  defense 121 

"  Every  agreement,  etc.,  is  void  unless  " 124 

May  third  persons  avail  themselves  of  the  statute 125 

"  Contract  for  the  sale  of  " 127 

"  Goods,  chattels  " 129 

Land:  in  general 129 

Standing  trees 130 

Crops:  cultivated  and  natural 132 

Water  and  ice 133 

Fixtures 134 

"  Things  in  action:  "  stocks,  bills  and  notes 136 

"  For  the  price  of  " 138 

"  Fifty  dollars  or  more  " 138 

When  is  limit  reached  or  exceeded 138 

Evidentiary  requirements:  in  general 139 

(1)  Writing:  "  unless  it  " 140 

"  Some  note  or  memorandum  " 141 

When  to  be  made 142 

Consists  of  what 142 

Contents  of 142 

"  Subscribed  "  or  "  signed  " 144 

"  By  the  party  to  be  charged  " 145 

"  Or  by  his  lawful  agent  " 148 

(2)  Acceptance  and  receipt 150 

Time  of 151 

By  agent 152 

Acceptance 152 

Receipt 155 

"  Part  of  such  goods  " 159 

"  Or  the  evidence,  etc.,  of  such  things  in  action  " 160 

"  Sale  or  return  " •.  160 

"  Or  give  something  in  earnest  to  bind  the  bargain  " 161 

(3)  Payment  of  part  of  purchase  money 162 

Purchase  money:  in  general 163 

Checks 164 

Bills  and  notes 166 

Pre-existing  debt 166 


vi  CONTENTS. 

PART  V. 

Remedies.  PACK. 

In  general 169 

Seller  vs.  buyer:  price,  where  title  has  passed 169 

Price,  where  title  has  not  passed 172 

Damages 175 

Measure  of  damages 175 

Some  rules  for  same 176 

Anticipatory  breach  of  contract 177 

Seller  PS.  goods:  lien 179 

Default  in  payment  does  not  rescind 180 

Lien  after  part  delivery 181 

Waiver  of  lien 181 

Stoppage  in  transit 182 

Origin  of  the  right 182 

Essentials  of  the  right 

Goods  must  be  in  transit 184 

Insolvency  of  buyer 186 

Resale  by  buyer 186 

Effect  of  the  exercise  of  the  right 

Seller  vs.  goods:  resale,  English  law 189 

Same:  American  law 190 

Same:  sales  and  contracts  to  sell 191 

Same:  manner  and  notice  of 192 

Same:  before  expiration  of  credit 192 

Same:  at  a  profit 195 

Rescission  by  seller:  England 196 

Same:  America 196 

Buyer  vs.  seller:  in  general 197 

Where  title  has  passed: 

Damages  for  refusal  to  deliver 197 

Measure  of 198 

Trover  or  replevin 198 

Measure  of  damages 198 

Where  title  has  not  passed:  damages 200 

Measure  of 200 

Specific  performance 201 

Appendix. 

Uniform  Sales  Act 303 


SUMMARY   OF   SALES. 


PART  I. 
ESSENTIALS  AND  DISTINCTIONS. 

Definitions. — "  Sale,  .  .  .,  is  a  transmutation  of 
property  from  one  man  to  another  in  consideration  of  some 
price  or  recompense  in  value."  (2  Blackstone's  Com.  446.) 

"A  sale  is  a  contract  for  the  transfer  of  property  from  one 
person  to  another,  for  a  valuable  consideration."  (2  Kent's 
Com.  468.) 

"A  sale  is  a  transfer  of  the  absolute  title  to  property  for  a 
certain  agreed  price.  It  is  a  contract  between  two  parties, 
one  of  whom  acquires  thereby  a  property  in  the  thing  sold, 
and  the  other  parts  with  it  for  a  valuable  consideration." 
(Story  on  Sales,  §  1.) 

"  Sale  is  a  word  of  precise  legal  import  both  at  law  and 
in  equity.  It  means  at  all  times,  a  contract  between  parties, 
to  give  and  to  pass  rights  of  property  for  money, —  which  the 
buyer  pays  or  promises  to  pay  to  the  seller  for  the  thing 
bought  and  sold."  (Williamson  v.  Berry,  8  How.  495,  544.) 

"A  contract  of  sale  of  goods  is  a  contract  whereby  the 
seller  transfers  or  agrees  to  transfer  the  property  in  goods 
to  the  buyer  for  a  money  consideration,  called  the  price. 

"  Where  under  a  contract  of  sale  the  property  in  the 
goods  is  transferred  from  the  seller  to  the  buyer  the  contract 
is  called  a  sale ;  but  where  the  transfer  of  the  property  in  the 
goods  is  to  take  place  at  a  future  time  or  subject  to  some 
condition  thereafter  to  be  fulfilled  the  contract  is  called  an 
agreement  to  sell."  (Sale  of  Goods  Act,  §  1.) 


2  SUMMARY  OF  SALES. 

"A  contract  to  sell  goods  is  a  contract  whereby  the  seller 
agrees  to  transfer  the  property  in  goods  to  the  buyer  for  a 
consideration  called  the  price. 

"A  sale  of  goods  is  an  agreement  whereby  the  seller  trans- 
fers the  property  in  goods  to  the  buyer  for  a  consideration 
called  the  price."  (Uniform  Sales  Act,  §  1.) 

Sale  and  contract  to  sell:  distinguished. —  Although 
"  sale  "  has  been  defined  or  described,  indifferently,  as  "  the 
transfer  of  title,"  as  "  a  contract  for  the  transfer  of  title," 
as  "  a  contract,"  or  as  "  an  agreement "  whereby  the  seller 
transfers  the  property,  i.  e.}  the  title,  in  goods  to  the  buyer 
for  a  money  consideration,  called  the  price,  the  fundamental 
distinction  between  a  sale,  in  which  the  title  is  immediately 
transferred,  and  a  contract  to  sell,  in  which  the  title  is  to  be 
transferred  in  the  future,  must  be  observed. 

"  By  an  agreement  to  sell  a  jus  in  personam  is  created, 
by  a  sale  a  jus  in  rem  is  transferred.  Where  goods  have 
been  sold,  and  the  buyer  makes  default,  the  seller  may  sue 
for  the  contract  price,  but  where  an  agreement  to  buy  is 
broken,  the  seller's  remedy  is  an  action  for  unliquidated 
damages.  If  an  agreement  to  sell  be  broken  by  the  seller,  the 
buyer  has  only  a  personal  remedy  against  the  seller.  The 
goods  are  still  the  property  of  the  seller,  and  he  can  dispose 
of  them  as  he  likes;  they  may  be  taken  in  execution  for  his 
debts,  and,  if  he  becomes  bankrupt,  they  pass  to  his  trustee, 
who  may  disclaim  the  contract.  But  if  there  has  been  a 
sale,  and  the  seller  breaks  his  engagement  to  deliver  the  goods, 
the  buyer  has  not  only  a  personal  remedy  against  the  seller, 
but  also  the  usual  proprietary  remedies  in  respect  of  the 
goods  themselves,  such  as  the  actions  for  conversion  and 
detinue.  In  many  cases,  too,  he  can  follow  the  goods  into 
the  hands  of  third  parties.  Again,  if  there  be  an  agreement 
for  sale,  and  the  goods  are  destroyed,  the  loss,  as  a  rule,  falls 
on  the  seller,  while,  if  there  has  been  a  sale,  the  loss,  as  a 
rule,  falls  upon  the  buyer,  though  the  goods  have  never  come 
into  his  possession."  (Chalmers,  Sale  of  Goods  [7th  ed.],  9.) 


ESSENTIALS  AND  DISTINCTIONS.  3 

The  distinction  between  a  sale  and  a  contract  to  sell  is 
recognized  in  the  Sale  of  Goods  Act  and  in  the  Uniform  Sales 
Act,  but  the  English  Act  (section  62)  makes  "  contract  of 
sale  "  include  "  an  agreement  to  sell  as  well  as  a  sale,"  unless 
the  context  or  subject-matter  of  the  Act  otherwise  requires, 
and  (section  1)  declares  that  "  a  contract  of  sale  of  goods  is 
a  contract ;"  where  the  title  is  to  be  transferred  in  the  future, 
"  the  contract  is  called  an  agreement  to  sell."  The  American 
Act  (section  1)  more  aptly,  perhaps,  declares  that  "  a  con- 
tract to  sell  goods  is  a  contract,"  and  that  "  a  sale  of  goods  is 
an  agreement,"  although  in  White  v.  Treat,  100  Fed.  Rep. 
290,  291,  it  is  said,  that  "  inasmuch  as  a  sale  is  a  contract 
or  agreement  it  is  frequently  spoken  of  as  '  a^contract  of  sale,' 
or  an  '  agreement  of  sale/  two  phrases  which  in  the  law  mean 
no  more  and  no  less  than  the  word  '  sale  V 

A  sale,  though  commonly  so  regarded,  is  not  a  contract,  but 
is  a  completed  transaction.  "  The  only  things  essential  to  a 
valid  sale  of  personal  property  at  common  law  were,  a  proper 
subject,  a  price,  and  the  consent  of  the  contracting  parties, 
and  when  these  concurred,  the  sale  was  complete,  and  the 
title  passed  without  anything  more."  (Cunningham  v.  Ash- 
brook,  20  Mo.  553,  556.)  This  is  sometimes  called  a  "  bar- 
gain and  sale,"  a  "  present  sale,"  or  an  "  executed  sale."  It 
suffices  to  call  it  a  sale.  If,  however,  the  title  is  not  imme- 
diately transferred,  but  is  to  be  transferred  at  some  future 
time,  the  result  will  ordinarily  be  accomplished  by  a  contract. 
This  is  sometimes  inaccurately,  at  least  inaptly,  called  a 
"  future  sale,"  or  an  "  executory  sale."  Strictly  speaking,  it 
is  a  contract  to  sell. 

Sale:  Roman  law. — Under  the  Roman  law,  "a  sale  was 
not  an  immediate  transmutation  of  property,  but  a  contract 
of  mutual  and  personal  engagements  for  the  transference  of 
the  thing  on  the  one  hand  and  the  payment  of  the  price  on 
the  other,  without  regard  to  the  time  of  performance  on  either 
part,  that  being  left  to  be  regulated  by  the  agreement  of  the 
parties,  the  seller  being  bound  to  deliver  the  thing  in  property 


4  SUMMARY    OB1    SALES. 

to  the  buyer  at  the  time  agreed  on,  and  the  buyer  to  pay  the 
price  in  the  manner  settled  between  them.  The  distinction 
was  carefully  observed  between  the  direct  right  of  property 
(jus  in  re)  conferred  by  delivery,  and  the  indirect  right  (jus- 
ad  rem)  to  demand  of  the  seller  delivery  of  the  thing  sold. 
There  thus  arose  out  of  the  contract  the  double  relation  of 
debtor  and  creditor,  as  to  the  thing  sold  and  the  price  to  be 
paid  for  it.  Corresponding  with  these  relations,  two  actions 
were  given,  both  personal  and  direct ;  one  for  the  thing  sold, 
the  other  for  the  price  due.  The  claim  for  the  price  being 
absolute  on  delivery  or  tender  of  the  thing  and  the  demand 
for  the  thing  conditional,  provided  it  had  not  in  the  meantime 
perished  without  fault  of  the  seller."  (Bell  on  Sales,  9.) 

Absolute  and  conditional  sales. —  Sales  are  sometimes 
classified  as  absolute  or  conditional.  The  sale  is  absolute 
when  the  transfer  of  title  is  complete,  although  a  so-called 
absolute  sale  may  be  subject  to  a  condition  subsequent.  In  a 
conditional  sale,  mayhap  a  misnomer,  the  title  is  not,  but  is  to 
be,  transferred  in  the  future,  upon  the  performance  of  a  con- 
dition or  the  happening  of  a  contingency,  a  conditional  con- 
tract to  sell,  although  a  contract  to  sell  may  be  absolute  as 
well  as  conditional. 

Anent  conditions  precedent  and  subsequent  in  conditional 
sales,  a  distinguished  writer  says :  "  In  an  ordinary  condi- 
tional sale  the  payment  of  the  price  is  by  the  express  terms 
of  the  agreement  a  condition  precedent  to  the  transfer  of 
title.  For  this  reason  it  has  been  argued  that  the  term  (  con- 
ditional sale '  is  a  misnomer  and  that  the  transaction  should 
properly  be  called  a  conditional  contract  of  sale  or  contract 
to  sell.  The  name  of  conditional  sale,  it  is  urged,  should  be 
reserved  for  a  transaction  where  title  is  transferred  imme- 
diately and  a  right  given  in  the  nature  of  a  condition  subse- 
quent to  resume  the  title  for  breach  of  condition.  The  dis- 
tinction between  a  sale  upon  condition  subsequent  and  a  con- 
ditional sale  as  ordinarily  made  with  a  condition  precedent 
is  not  so  extreme,  however,  as  this  argument  implies.  The 
ordinary  conditional  sale  does  not  rest  wholly  in  agreement. 


ESSENTIALS  AND  DISTINCTIONS.  5 

It  is  not  merely  a  contract  to  sell  to  which  is  superadded  a 
contract  that  the  buyer  shall  have  possession.  If  this  were 
all,  the  seller  could  at  any  time  break  his  contract,  subjecting 
himself  thereby  to  liability  of  damages.  In  fact  the  buyer 
acquires  not  simply  a  contract  right  but  a  property  right. 
This  is  due  to  the  fact  that  the  seller  does  not  simply  contract 
that  the  buyer  shall  have  possession;  the  seller  actually  de- 
livers possession,  and  this  possession  is  delivered  not  to  hold 
the  goods  for  the  seller,  but  to  use  as  the  buyer's  own.  More- 
over, the  buyer,  so  long  as  he  is  not  in  default,  may  maintain 
his  possession  and  use  of  the  property  against  the  world.  The 
situation  is,  therefore,  identical  with  the  case  of  the  condition 
subsequent  except  that  in  the  case  of  the  condition  precedent 
the  seller  has  a  bare  legal  title  for  the  purpose  of  security 
only,  while  in  the  case  of  the  condition  subsequent  the  seller 
has  only  the  right  to  regain  a  legal  title  on  the  happening 
of  a  condition."  (Williston  on  Sales,  §  330.) 

If  we  adhere,  however,  to  the  true  conception  of  sale  as  a 
completed  transaction,  and  not  a  contract,  in  which,  it  is 
inaccurately  said,  two  distinct  obligations  of  the  seller  are 
involved,  viz.,  "  first,  to  pass  the  property  in  the  thing  sold; 
secondly  to  deliver  possession  of  it  "  (Martineau  v.  Kitcliing, 
L.  R.  7  Q.  B.  436), —  the  second,  strictly  speaking,  being 
purely  an  incident  of  a  property  right  and  not  a  contractual 
obligation  at  all,  nor,  by  any  proper  consideration,  two  con- 
tracts by  superaddition, —  it  would  seem  necessarily  to  follow 
that  the  expression  "  conditional  sale,"  although  frequently 
employed,  is  a  contradiction  in  terms,  and  hence  a  misnomer. 

Voluntary  and  involuntary  sales. —  Sales  are  also  de- 
scribed as  voluntary  or  involuntary.  A  sale  is  voluntary 
when  made  by,  or  under  the  authority  of,  the  owner  of  the 
goods,  and  involuntary  or  forced  when  made,  not  by  his  will, 
but  by  the  authority  of,  and  in  pursuance  of,  the  law,  as  in 
sheriffs',  executors,'  guardians'  and  judicial  sales.  "A  forced 
sale  has  been  defined  to  be  a  sale  made  at  the  time  and  in 
the  manner  prescribed  by  law,  in  virtue  of  an  execution 


6  SUMMARY  OF  SALES. 

issued  upon  a  judgment  already  rendered  by  a  court  of  com- 
petent jurisdiction:  ...  or,  in  other  words,  a  forced 
sale  is  one  which  is  made  under  the  process  of  the  court  and 
in  the  mode  prescribed  by  law."  (Sampson  v.  Williamson, 
6  Tex.  102,  110.) 

Subject-matter:  in  general. —  It  is  said  that  anything  of 
value  belonging  to  the  seller  and  actually  or  potentially  in 
existence  may  be  made  the  subject  of  a  sale  (Mechem  on 
Sales,  §  197),  and  that  this  does  not  mean  "  that  the  subject 
of  sale  should  have  a  physical  and  corporeal  existence  and  be 
susceptible  of  manual  delivery;  for,  provided  it  have  an 
actual  value,  however  intangible  it  may  be,  it  may  neverthe- 
less be  sold."  (Story  on  Sales  [4th  ed.],  §  187.) 

On  the  other  hand,  it  is  said,  that  the  subject-matter  "  does 
not  embrace  every  form  of  personal  property,  but  is  generally 
said  to  consist  in  goods  "  (Burdick  on  Sales  [2d  ed.],  5),  and 
that  "  the  most  troublesome  question  in  any  attempt  to  define 
the  meaning  of  goods  relates  to  the  dividing  line  between  real 
and  personal  property."  (Williston  on  Sales,  §  60.) 

That  it  has  seemingly  been  thus  limited  is  the  result,  per- 
haps, of  statute,  as  for  example  the  Statute  of  Frauds,  under 
which  topic  herein  the  meaning  of  "  goods  "  will  later  be 
considered. 

Existing  and  future  goods :  in  general. —  Irrespective  of 
their  meaning,  "  goods,  in  reference  to  the  disposition  of 
them  by  sale,  may  be  considered  as  existing  separately  and 
ready  for  immediate  delivery,  or  as  a  part  of  a  larger  mass 
from  which  they  must  be  separated  by  counting,  weighing  or 
measuring,  or  as  goods  to  be  hereafter  procured  and  supplied 
to  the  buyer,  or  to  be  manufactured  for  his  use.  Goods  of  the 
first  sort  are  the  only  proper  subjects  of  a  common  law  sale, 
.,  although  there  are  some  apparently  anomalous 
cases  in  our  books  in  which  transactions  in  reference  to  goods 
to  be  separated  from  a  mass  seem  to  have  been  treated,  where 
there  had  been  a  constructive  delivery,  as  valid  sales,  produc- 
ing a  present  change  of  property. 


ESSENTIALS  AND  DISTINCTIONS.  7 

"  The  general  rule,  however,  is  otherwise,  and  all  the 
different  sorts  of  goods  to  which  we  have  referred,  except  the 
first,  are,  under  our  law,  the  proper  subjects  only  of  executory 
agreements  —  contracts  for  the  future  sale  and  delivery  of 
them."  (Cunningham  v.  Ashbrook,  20  Mo.  553,  556.)  This 
is  a  statement  of  the  common  law,  and  is  still  the  law  in 
England  (see  sections  5  and  16-18  of  the  Sale  of  Goods  Act), 
but  the  "  anomalous  cases  "  referred  to  in  Cunningham  v. 
Ashbrook,  supra,  represent  the  American  doctrine  as  ex- 
pressed in  the  leading  case  of  Kimberly  v.  Patchin,  19  1ST.  Y. 
330,  of  which  more  hereafter  under  the  topic  of  the  Transfer 
of  Title,  and  which,  moreover,  is  supported  by  the  weight  of 
recent  American  authority.  (See,  also,  sections  5  and  6  of 
the  Uniform  Sales  Act.) 

A  "  bargain  and  sale,"  or  sale,  is  possible  only  when  the 
goods  are  existing  and  specific  or  ascertained,  and,  according 
to  the  doctrine  of  Kimberly  v.  Patchin,  supra,  they  are 
sufficiently  specific  or  ascertained,  when  the  goods  are 
fungible,  i.  e.,  when  each  particle  is  identical  with  every  other 
particle  as  in  wheat,  oil  and  wine,  or  when  the  buyer  and 
seller  agree  to  act  on  the  assumption  that  the  goods  are  all 
alike,  although  there  was  no  separation  by  measuring,  weigh- 
ing or  counting ;  but,  while  all  other  goods  may  be  the  subject 
only  of  a  contract  to  sell,  it  is  self-evident  that  there  may  be 
a  contract  to  sell,  as  well  as  a  sale  of,  existing  and  specific 
or  ascertained  goods,  according  as  the  parties  intend. 

Existence  of  subject-matter:  sale. —  Pothier  (Contrat  de 
Vente,  No.  4)  says :  "  There  must  be  a  thing  sold,  which 
forms  the  subject  of  the  contract.  If  then,  ignorant  of  the 
death  of  my  horse,  I  sell  it,  there  is  no  sale  for  want  of  a 
thing  sold."  In  Bates  v.  Smith,  83  Mich.  347,  350,  it  is  said : 
"  If  it  appears  that  the  subject-matter  of  a  contract  was  not, 
and  could  not  have  been,  in  existence  at  the  time  of  such 
contract,  the  contract  itself  is  of  no  effect,  and  may  be  disre- 
garded by  either  party."  See,  also,  section  7  of  the  Uniform 
Sales  Act,  which  covers  not  only  non-existence  or  total  de- 


8  SUMMARY  OF  SALES. 

struction  of  the  thing  sold,   but   also  the  contingency  of 
deterioration  or  partial  destruction. 

The  reasons  for  treating  such  a  sale  void  have  been 
cogently  stated  as  follows :  "  Sometimes  the  result  is  put 
upon  the  ground  of  impossibility,  sometimes  upon  the  ground 
of  mistake,  and  sometimes  on  the  lack  of  mutual  assent  owing 
to  the  mistake.  So  far  as  the  existence  of  a  sale  is  concerned, 
that  is,  the  actual  transfer  of  title  to  property,  of  course  there 
is  absolute  impossibility.  The  real  question,  however,  is 
whether  the  buyer  and  seller  are  excused  from  all  liability. 
Even  though  there  is  no  sale  the  seller  may  be  liable  on  an 
obligation  of  warranty  or  contract  (referring  to  §  137  of 
Williston  on  Sales),  and  similarly  the  buyer  might  be  liable 
on  an  obligation  to  pay  the  price.  No  such  obligation,  how- 
ever, exists  on  either  side.  The  seller  is  excused  from  any 
such  obligation  by  the  doctrines  both  of  impossibility  and 
mistake.  As  the  obligation  would  relate  to  a  specific  thing, 
the  non-existence  of  the  thing,  without  his  fault,  excuses  him 
(citing,  among  other  cases,  Gilbert  &  Co.  v.  Butler,  146  Mass. 
82;  Stewart  v.  Stone,  127  1ST.  Y.  500;  Young  v.  Leary,  135 
N.  Y.  569 ;  Dolan  v.  Rodgers,  149  K  Y.  489).  Even  apart 
from  the  doctrine  of  impossibility  the  mutual  mistake  under 
which  the  parties  labored  would  excuse  the  seller  from  any 
obligation.  On  the  part  of  the  buyer  there  is  no  question  of 
impossibility,  it  is  entirely  possible  for  him  to  pay  the  price. 
If  the  promise,  however,  was  expressly  or  impliedly  condi- 
tional upon  the  transfer  of  title,  which  would  generally  be  the 
case,  the  nonperformance  of  this  condition,  for  whatever 
reason,  would  necessarily  excuse  him.  Even  though  his 
promise  to  pay  the  price  was  not  conditional,  the  destruction 
of  the  goods  for  which  the  price  was  to  be  paid  would  be  such 
failure  of  consideration  as  to  excuse  him  from  paying  the 
price  if  he  had  not  already  paid  it.  The  doctrine  of  mutual 
mistake  would  also  excuse  the  buyer  as  well  as  the  seller.  It 
is  not  accurate,  however,  to  say  that  there  is  no  mutual 
assent ;  the  parties  do,  in  fact,  assent  to  the  same  thing.  The 
mistake  which  they  make  is  ground  for  excusing  them  from 


ESSENTIALS  AND  DISTINCTIONS.  9 

the  bargain  they  made.     It  is  not  a  ground  for  saying  they 
never  made  a  bargain."     (Williston  on  Sales,  §  161.) 

Existence  of  subject-matter:  sale,  Roman  law. —  Under 
the  Roman  law,  "  If  the  thing  which  it  has  been  agreed  to 
buy  and  sell  has,  unknown  to  both  parties,  ceased  to  exist  at 
the  time  at  which  contract  is  made,  the  contract  is  void.  The 
vendor  must  return  the  purchase  money,  if  he  has  been  paid ; 
and  if  he  alone  knew  that  the  property  no  longer  existed  he 
is  further  liable  to  compensate  the  purchaser  in  damages  for 
any  loss  which  he  may  sustain  through  nonperformance, 
whereas  if  the  purchaser  alone  knew  it,  he  is  bound  to  pay 
the  purchase  money,  and  has  no  rights  himself  against  the 
vendor.  If  both  were  aware  that  the  property  no  longer 
existed,  the  contract  is  void."  (Moyle,  Contract  of  Sale,  in 
the  Civil  Law,  21.) 

Continued  existence  of  subject-matter:  contract  to  sell. — 
"  Where  there  is  a  contract  to  sell  specific  goods,  and  subse- 
quently, but  before  the  risk  passes  to  the  buyer,  without  any 
fault  on  the  part  of  the  seller  or  the  buyer,  the  goods  wholly 
perish,  the  contract  is  thereby  avoided."  (Uniform  Sales 
Act,  sub-section  (1)  of  section  8.)  This  is  also  the  common 
law,  and  involves  a  principle  applicable  to  the  law  of  con- 
tracts generally.  "  The  principle  seems  to  us  to  be,"  says 
Blackburn,  J.,  in  Taylor  v.  Caldwell,  3  B..  &  S.  826,  839, 
"  that  in  contracts  in  which  the  performance  depends  on  the 
continued  existence  of  a  given  person  or  thing,  a  condition  is 
implied  that  the  impossibility  of  performance  arising  from 
the  perishing  of  the  person  or  thing  shall  excuse  the  per- 
formance." The  law  in  regard  to  impossibility  as  excuse 
for  non-performance  has  been  expressed  as  follows :  "  Where 
there  is  a  positive  contract  to  do  a  thing,  not  in  itself  unlaw- 
ful, the  contractor  must  perform  it  or  pay  damages  for  not 
doing  it,  although  in  consequence  of  unforeseen  accidents,  the 
performance  of  his  contract  has  become  unexpectedly  burthen- 
some  or  even  impossible.  .  .  .  But  this  rule  is  only 


10  SUMMARY  OF  SALES. 

applicable  when  the  contract  is  positive  and  absolute,  and 
not  subject  to  any  condition  either  express  or  implied:  and 
there  are  authorities  which,  as  we  think,  establish  the  prin- 
ciple that  where,  from  the  nature  of  the  contract,  it  appears 
that  the  parties  must  from  the  beginning  have  known  that 
it  could  not  be  fulfilled  unless  when  the  time  for  the  fulfil- 
ment of  the  contract  arrived  some  particular  specified  thing 
continued  to  exist,  so  that,  when  entering  into  the  contract, 
they  must  have  contemplated  such  continuing  existence  as  the 
foundation  of  what  was  to  be  done;  there,  in  the  absence  of 
any  express  or  implied  warranty  that  the  thing  shall  exist,  the 
contract  is  not  to  be  construed  as  a  positive  contract,  but  as 
subject  to  an  implied  condition  that  the  parties  shall  be  ex- 
cused in  case,  before  breach,  performance  becomes  impos- 
sible from  the  perishing  of  the  thing  without  default  of  the 
contractor."  .  (Taylor  v.  Caldwell,  3  B.  &  S.  826,  833.)  This 
is  the  recognized  rule  of  the  common  law.  (Rugg  v.  Minett, 

11  East,  210;  Dexter  v.  Norton,  4T  N".  Y.  62;  Wells  v.  Cal- 
nan,  107  Mass.  514;  Thomas  v.  Knowles,  128  Mass.  22.) 
See,  also,  sub-section  (2)  of  section  8  of  the  Uniform  Sales 
Act,    which   covers    the   case    of    deterioration    or    partial 
destruction. 

Future  goods :  potential  existence,  sale. —  From  the  nature 
of  a  sale,  heretofore  considered,  it  would  seem  manifestly 
impossible  for  a  seller  to  make  a  present  sale  of  goods  which 
he  neither  owns  nor  possesses  at  the  time  he  purports  to  sell 
them.  "  It  is  a  common  learning  in  the  law  that  a  man  cannot 
grant  or  charge  that  which  he  hath  not  "  (Perkins'  Profitable 
Book,  tit.  Grant,  §  65),  nemo  dat  quod  non  habet.  However, 
a  distinction  seems  to  have  arisen,  at  least  as  early  as  1443, 
between  future  goods  in  which  the  seller  has,  and  those  in 
which  he  has  not,  a  potential  right  of  property.  (Fitzwilliam 
v.  The  Parson  of  Arcsay,  Yr.  Bk.  21  Hen.  VI.  43.)  The 
former  class  consists  of  the  natural  produce  or  increase  of 
that  which  is  owned  or  possessed  by  the  seller  at  the  time 
he  sells,  e.  g.,  the  future  offspring  (Hull  v.  Hull,  48  Conn. 


ESSENTIALS  AND  DISTINCTIONS.  11 

250;  McCarty  v.  Blevins,  5  Yerg.  195)  or  the  products  (Van 
Hoozer  v.  Cory,  34  Barb.  9)  of  animals  belonging  to  the 
seller,  or  future  crops  from  his  land  (Briggs  v.  U.  8.,  143  TJ. 
S.  346).  The  latter  class  consists  of  all  other  future  goods 
not  the  natural  produce  or  increase  of  that  which  is  owned 
or  possessed  by  the  seller  at  the  time  he  sells,  e.  g.,  the  wool 
of  any  sheep,  or  the  crops  of  any  land,  which  the  seller 
might  subsequently  acquire.  "  It  is  frequently  held  that  a 
man  may  sell  property  of  which  he  is  potentially  but  not 
actually  possessed.  He  may  make  a  valid  sale  of  the  wine 
that  a  vineyard  is  expected  to  produce;  or  the  grain  a  field 
may  grow  in  a  given  time ;  or  the  milk  a  cow  may  yield  during 
a  coming  year;  or  the  wool  that  shall  thereafter  grow  upon 
sheep ;  .  .  .  ;  or  fruits  to  grow ;  or  young  animals  not  yet 
in  existence;  .  .  .  The  thing  sold,  however,  must  be 
specific  and  identified ;  it  must  be,  for  instance,  the  product 
of  a  particular  vineyard  or  field,  or  the  wool  from  a  particular 
sheep.  These  must  also  be  owned  at  the  time  by  the  vendor. 
A  person  cannot  sell  the  products  of  a  field  which  he  does 
not  own  at  the  time  of  sale,  but  which  he  expects  to  own." 
(Emerson  v.  European,  etc.,  Ry.  Co.,  67  Me.  387,  392.)  In 
short,  "  things  have  a  potential  existence  which  are  the 
natural  product  or  expected  increase  of  something  already 
belonging  to  the  vendor  "  (Hutchinson  v.  Ford,  9  Bush,  318, 
319),  and,  when  goods  are  in  potential  existence,  they  may 
be  the  subject  of  present  sale,  as  well  as  goods  in  actual 
existence,  notwithstanding  they  are  future  goods.  In  the 
other  class  of  future  goods,  in  which  the  seller  is  said  not 
to  have  a  potential  interest,  the  title  will  pass  in  the  future, 
and  may  therefore  be  the  subject  only  of  a  contract  to  sell. 
"  The  only  difference  therefore,"  says  Mr.  Benjamin  (Sales 
[5th  Eng.  ed.],  132),  "between  the  two  classes  of  future 
goods  seems  to  be  in  respect  of  the  time  of  the  passing  of  the 
property." 

As  to  when  the  title  of  goods  in  potential  existence,  in  case 
of  a  present  sale,  passes,  Mr.  Williston  (Sales,  §  133)  says: 
"  It  is  obvious  in  the  nature  of  the  case,  title  cannot  pass 


12  SUMMARY  OF  SALES. 

when  the  bargain  is  made,  but  it  would  be  possible  to  say  that 
title  passed  as  soon  as  the  goods  came  into  existence,  and, 
.  .  . ,  this  would  be  an  extension  beyond  the  general  rule  of 
the  common  law  as  to  future  goods.  The  rule,  however,  seems 
to  have  a  wider  meaning  than  this  when  carried  to  its  full 
extent.  It  seems  to  be  assumed  that  title  passes  as  of  date  of 
the  bargain.  Accurately  expressed,  this  means  that  when  the 
goods  come  into  existence,  title  to  them  passes  free  from  any 
defects  of  title  due  to  rights  which  have  accrued  since  the 
time  of  the  original  bargain." 

The  leading  case  upon  this  subject  is  Grantham  v.  Hawley, 
Hob.  132,  in  which  it  was  held  that  the  purchaser  of  a  future 
crop  of  corn  from  a  lessee  of  the  land  had  a  better  title  thereto 
than  the  reversionary  owner  of  the  lease,  the  court  saying: 
"  Therefore  he  that  hath  it  [the  land]  may  grant  all  fruits 
that  may  arise  upon  it  after,  and  the  property  shall  pass  as 
soon  as  the  fruits  are  extant,  as  21  Hen.  6.  A  person  may 
grant  all  the  tithe-wool  that  he  shall  have  in  such  a  year,  yet 
perhaps  he  shall  have  none;  but  a  man  cannot  grant  all  the 
wool  that  shall  grow  upon  his  sheep  that  he  shall  buy  here- 
after; for  there  he  hath  it  neither  actually  nor  potentially." 

The  case  of  Grantham  v.  Hawley  has  been  generally  fol- 
lowed. Says  the  court  in  Low  v.  Pew,  108  Mass.  347,  349, 
"  It  is  an  elementary  principle  of  the  law  of  sales,  that  a  man 
cannot  grant  personal  property  in  which  he  has  no  interest 
or  title.  To  be  able  to  sell  property,  he  must  have  a  vested 
right  in  it  at  the  time  of  the  sale  .  .  . 

"  It  is  equally  well  settled  that  it  is  sufficient  if  the  seller 
has  a  potential  interest  in  the  thing  sold.  But  a  mere  possi- 
bility or  expectancy  of  acquiring  property,  not  coupled  with 
any  interest,  does  not  constitute  a  potential  interest  in  it, 
within  the  meaning  of  this  rule.  The  seller  must  have  a 
present  interest  in  the  property,  of  which  the  thing  sold  is 
the  product,  growth  or  increase.  Having  such  interest,  the 
right  to  the  thing  sold,  when  it  shall  come  into  existence,  is  a 
present  vested  right,  and  the  sale  of  it  is  valid." 


ESSENTIALS  AND  DISTINCTIONS.  13 

In  Rochester  Distilling  Co.  v.  Rasey,  142  N.  Y.  570,  a 
limitation  has  been  put  upon  the  case  of  Grantham  v.  Hawley, 
the  court,  at  p.  575,  saying :  "  Grantham  v.  Hawley,  Hobart, 
132,  is  the  general  source  of  authority  for  the  proposition 
that  one  may  grant  what  he  has  only  potentially,  and  there  is 
no  good  reason  for  doubting  that  that  which  has  a  potential, 
or  possible  existence,  like  the  spontaneous  product  of  the 
earth,  or  the  increase  of  that  which  is  in  existence,  may  prop- 
erly be  the  subject  of  sale,  or  of  mortgage.  The  right  to  it, 
when  it  comes  into  existence,  is  regarded  as  a  present  vested 
right.  That  which  is,  however,  the  annual  product  of  labor 
and  of  the  cultivation  of  the  earth  cannot  be  said  to  have 
either  an  actual,  or  a  potential  existence  before  a  planting." 

"  In  Scotch  law,  a  contract  purporting  to  effect  the  present 
sale  of  a  chance,  such  as  the  cast  of  a  net,  operates  as  a  present 
sale  of  the  incorporeal  thing.  (Bell's  Principles,  §  92). 
'  Such  a  chance  is  a  res  in  the  wide  jural  sense  of  the  word.' 
(Mackintosh's  Eoman  Law  of  Sale,  25.)  English  law  treats 
it  as  a  contract  for  the  sale  of  the  subject  of  the  chance,  and 
unless  falling  under  the  ban  of  illegality  because  a  wager,  it 
will  be  enforced  as  an  executory  agreement,  even  though  the 
chance  produces  nothing.  (Hitchcock  v.  Giddings,  4  Price, 
135,  140;  Hanks  v.  Palling,  6  E.  &  B.  659.)  As  a  present 
sale  it  has  no  validity.  (Low  v.  Pew,  108  Mass.  347.)" 
(Burdick  on  Sales  [2d  ed.],  11.) 

In  Low  v.  Pew,  supra,  the  parties  purported  to  effect  a 
present  sale  of  future  goods,  viz.,  all  the  halibut  that  might 
be  caught  by  the  master  and  crew  of  a  certain  schooner  on  a 
certain  voyage  to  the  Grand  Banks.  Prior  to  the  return 
of  the  schooner  from  the  Banks,  the  sellers  became  bankrupts, 
and,  upon  the  return  of  the  schooner  with  the  fish,  the  buyers 
claimed,  and  instituted  replevin  to  obtain,  the  halibut  from 
the  assignees  of  the  sellers,  but  the  court,  at  page  349,  said: 
"  It  seems  to  us  clear,  as  claimed  by  both  parties,  that  this 
was  a  contract  of  sale,  and  not  a  mere  executory  agreement 
to  sell  at  some  future  day.  The  plaintiffs  cannot  maintain 
their  suit  upon  any  other  construction,  because,  if  it  is  an 


14  SUMMARY  OF  SALES. 

executory  agreement  to  sell,  the  property  in  the  halibut  re- 
mained in  the  bankrupts,  and,  there  being  no  delivery  before 
the  bankruptcy,  passed  to  the  assignees.  The  question  in 
the  case  therefore  is,  whether  a  sale  of  halibut  afterwards  to 
be  caught  is  valid,  so  as  to  pass  to  the  purchaser  the  property 
in  them  when  caught.  *  *  *  The  sellers,  at  the  time  of 
the  sale,  had  no  interest  in  the  thing  sold.  There  was  a 
possibility  that  they  might  catch  halibut;  but  it  was  a  mere 
possibility  and  expectancy,  coupled  with  no  interest.  We  are 
of  opinion  that  they  had  no  actual  or  potential  possession  of, 
or  interest  in,  the  fish ;  and  that  the  sale  to  the  plaintiffs  was 
void." 

The  Uniform  Sales  Act  wisely  makes  no  distinction  be- 
tween goods  in  potential  existence  and  other  future  goods. 
Under  sub-section  3  of  section  5  of  that  Act,  the  agreement  in 
Low  v.  Pew,  purporting  to  effect  a  present  sale  of  the  halibut, 
would  operate  only  as  a  contract  to  sell,  and  the  plaintiffs, 
under  the  circumstances  of  that  case,  could  not  claim  title  to 
the  fish. 

Future  goods:  sale,  in  equity.— The  doctrine  of  potential 
existence  or  potential  possession,  however,  is,  except  in  those 
jurisdictions  where  the  Uniform  Sales  Act  has  been  enacted 
into  law,  recognized  and  accepted,  the  only  limitations,  if  any 
there  be,  apparently  being,  that  crops  that  are  "  the  annual 
product  of  labor  and  of  the  cultivation  of  the  earth  cannot 
be  said  to  have  either  an  actual,  or  a  potential  existence  before 
a  planting  "  (Rochester  Distilling  Co.  v.  Rasey,  142  N".  Y. 
570,  576),  and  sometimes  not  even  until  the  crop  has  germi- 
nated (Comstock  v.  Scales,  7  Wis.  159).  Goods  therefore 
that  are  in  potential  existence,  as  well  as  in  actual  existence, 
at  the  time  of  agreement,  may  be  the  subject  of  sale,  assign- 
ment or  mortgage.  "  Other  things,"  however,  "  not  having  an 
existence  actual  or  potential,  but  the  future  acquisition  of 
which  is  merely  expected  or  contemplated,  are  not  the  subject 
of  sale,  assignment,  or  mortgage,  according  to  the  common 
law.  A  different  doctrine,  however,  prevails  in  a  court  of 


ESSENTIALS  AND  DISTINCTIONS.  15 

equity.  The  sale,  or  mortgage,  or  assignment,  does  not  pass 
the  legal  title  to  such  property,  unless,  after  it  comes  into 
existence,  the  vendor  or  mortgagor  shall  do  some  new  act  for 
the  purpose  of  ratifying  or  carrying  it  into  effect.  Neverthe- 
less, it  creates  an  equitable  interest,  attaching  to  the  property 
when  it  is  acquired,  or  when  it  comes  into  existence,  that  a 
court  of  equity  will  enforce  "  (Hurst  v.  Bell,  72  Ala.  336, 
340 ) ,  and  protect  against  all  persons  other  than  bona  fide 
purchasers  from  the  seller,  assignor  or  mortgagor  (Joseph  v. 
Lyons,  15  Q.  B.  D.  280;  Deering  v.  Cobb,  74  Me.  334),  or 
attaching  or  execution  creditors  of  the  seller,  assignor  or 
mortgagor  (Rochester  Distilling  Co.  v.  Rasey,  142  N.  Y. 
570 ;  Blanchard  v.  Cooke,  144  Mass.  218 ;  Gittings  v.  Nelson, 
86  111.  591). 

In  New  York  it  is  said  that,  "  Invalidity  at  law  imports 
nothing  more  than  that  a  mortgage  of  property  thereafter  to 
be  acquired  is  ineffectual  as  a  grant  to  pass  the  legal  title. 
A  court  of  equity,  in  giving  effect  to  such  a  provision,  does 
not  put  itself  in  conflict  with  that  principle.  It  does  not  hold 
that  a  conveyance  of  that  which  does  not  exist  operates  as  a 
present  transfer  in  equity,  any  more  than  it  does  in  law.  But 
it  construes  the  instrument  as  operating  by  way  of  present 
contract,  to  give  a  lien,  which,  as  between  the  parties,  takes 
effect  and  attaches  to  the  subject  of  it  as  soon  as  it  comes  into 
the  ownership  of  the  party."  (Kribbs  v.  Alford,  120  N.  Y. 
519,  524.)  This  is  in  accord  with  McCaffrey  v.  Woodin,  65 
K  Y.  459,  and  is  followed  in  Central  Trust  Co.  cf  N.  Y-  v. 
West  India  Improvement  Co.,  169  N.  Y.  314,  wherein  it  was 
held  that  a  mortgage  of  securities  to  be  thereafter  issued  gives 
a  valid  equitable  lien  which  attaches  as  soon  as  the  securities 
come  into  the  hands  of  the  mortgagor.  If  such  lien  is  to 
prevail  against  third  persons  without  notice,  and  if  the  effect 
is  reached  by  construing  the  instrument  as  operating  by  way 
of  present  contract,  it  is  difficult  to  reach  other  conclusion 
than  that  equity  in  such  view  does  conflict  with  the  common 
law,  because  the  idea  of  a  lien  is  inconsistent  with  the  idea 
of  ownership  or  title  in  the  seller,  assignor  or  mortgagor. 


16  SUMMAEY    OF    SALES. 

The  view  that  the  mortgagee  acquires  no  rights  superior  to 
bona  fide  purchasers  from,  or  attaching  or  execution  creditors 
of,  the  mortgagor,  unless  the  mortgagee  takes  possession  prior 
to  the  time  when  their  rights  attach,  is  distinctly  recognized 
in  Rochester  Distilling  Co.  v.  Rasey,  142  N.  Y.  570,  and  in 
N.  Y.,  etc.,  Co.  v.  Saratoga,  etc.,  Co.,  159  1ST.  Y.  137.  The 
question  seems,  without  sound  reason  therefor,  to  be  regarded 
as  of  peculiar  importance  in  cases  of  insolvency  of  the  mort- 
gagor. (See  Williston  on  Sales,  §§  138-144.) 

Future  goods:  contract  to  sell. — "It  was  formerly  held 
that  when  the  vendor  had  neither  the  goods,  nor  entertained 
any  contract  to  buy  them,  at  the  time  of  the  sale,  nor  had  any 
reasonable  expectation  of  receiving  them  by  consignment,  but 
intended  to  go  into  the  market  and  buy  the  articles  he  engaged 
to  deliver,  no  action  could  be  maintained  on  such  contract. 
But  that  rule  has  been  changed  by  the  later  authorities, 
and  there  have  been  numerous  decisions,  particularly  in  this 
country,  holding  that  the  vendor  may  contract  for  the  sale  of 
an  article  not  in  his  possession,  and  this  doctrine  seems  to 
be  entirely  in  accordance  with  the  rules  of  public  policy." 
(Whitesides  v.  Hunt,  97  Ind.  191,  195.)  See,  also,  sub- 
section 2  of  section  5  of  the  Uniform  Sales  Act. 

Contracts  for  the  sale  and  future  delivery  of  goods  which 
the  vendor  neither  owns  nor  possesses  at  the  time  of  making 
the  contract,  but  which  may  be  procured  by  him,  are  valid 
or  invalid  contracts,  to  be  determined  from  the  intention  of 
the  parties.  "  Where  a  commodity  is  bought  for  future  de- 
livery, no  matter  what  the  form  of  the  contract  is,  the  law 
regards  the  substance  and  not  the  shadow,  and  if  the  parties 
mutually  understood  and  intended  that  the  purchaser  should 
pay  for  and  the  seller  should  deliver  the  commodity  at  the 
maturity  of  the  contract,  it  is  a  legal  and  valid  transaction ; 
and  the  fact  that  the  purchaser  is  required  to  deposit  a  mar- 
gin and  increase  the  same  at  any  time  the  market  requires  it, 
in  order  to  secure  the  payment  at  maturity,  or  that  the  seller 
shall  deposit  a  margin  and  increase  the  same,  like  the  pur- 


ESSENTIALS  AND  DISTINCTIONS.  17 

chaser,  in  order  to  secure  the  delivery  at  maturity,  does  not 
vitiate  the  contract.  But  if,  at  the  time  of  the  contract, 
it  is  mutually  understood  and  intended  by  all  the  parties, 
whether  expressed  or  not,  that  the  commodity  said  to  be  sold 
was  not  to  be  paid  for  nor  to  be  delivered,  but  that  the  con- 
tract was  to  be  settled  and  adjusted  by  the  payment  of  differ- 
ence in  price  —  if  the  price  should  decline  the  purchaser  pay- 
ing the  difference,  if  it  should  rise  the  seller  paying  the  ad- 
vance, the  contract  price  being  the  basis  upon  which  to  calcu- 
late differences, —  in  such  a  case  it  would  be  a  gambling  con- 
tract and  void,  and  the  deposits  of  margin  are  only  to  be  con- 
sidered as  attempting  to  secure  the  terms  of  the  bet  on  prices 
at  some  future  time."  (Whitesides  v.  Hunt,  97  Ind.  191, 
202.)  In  accord  therewith  are  Story  v.  Salomon,  71  N.  Y. 
420;  Sampson  v.  Shaw,  101  Mass.  150;  Harvey  v.  Merrill, 
150  Mass.  1;  Lyon  v.  Culbertson,  83  111.  33;  Maxton  v. 
Gheen,  75  Pa.  St.  166. 

Price :  in  general. —  In  sales  and  in  contracts  to  sell,  the 
price  is  called  the  consideration  for  the  transfer  of  the  prop- 
erty (see  Definitions,  page  1,  and  sub-sections  1  and  2  of  sec- 
tion 1  of  the  Uniform  Sales  Act,  and  sub-section  1  of  section 
1  of  the  Sale  of  Goods  Act) ,  and,  as  generally  recognized  and 
technically  considered,  must  consist  of  money  or  money  valu- 
ation, paid  or  promised.  (Williamson  v.  Berry,  8  How.  495, 
544;  Gunter  v.  Leckey,  30  Ala.  591,  596 ;  Pickard  v.  McCor- 
mick,  11  Mich.  68,  77 ;  Herrick  v.  Carter,  56  Barb.  41.) 

According  to  sub-section  2  of  section  9  of  the  Uniform 
Sales  Act,  "  the  price  may  be  made  payable  in  any  personal 
property."  That  Act  expressly  brings  barter  or  exchange, 
and  contracts  to  barter  or  exchange,  directly  under  the  law 
of  sales,  while  the  English  Act  (sub-section  1  of  section  1) 
still  clings  to  "  money  consideration."  Commenting  thereon, 
Mr.  Williston  (Sales,  §  170)  says:  "It  has  doubtless  been 
universally  said  that  the  price  must  be  payable  in  money. 
This  statement  seems  to  have  been  copied  from  the  Roman 
law  without  observation  of  essential  differences  between  that 


18  SUMMARY  OF  SALES. 

law  and  the  common  law.  ...  In  our  law,  however, 
there  is  no  different  rule  applicable  to  a  contract  of  sale 
from  that  which  is  applicable  to  contract  of  exchange.  It 
would  seem  unfortunate  in  codifying  the  law  of  sales  to 
exclude  contracts  of  exchange  which  turn  on  precisely  the 
same  principles  and  which  differ,  if  at  all,  only  in  name. 
The  only  doubtful  point  indeed,  in  regard  to  exchanges,  is 
whether  they  differ  even  in  that  respect." 

Fixing  the  price.—  As  price  is  essential  to  a  sale,  and  to  a 
contract  to  sell,  it  must  be,  expressly  or  impliedly,  fixed  or 
made  certain  by  the  parties,  or  be  made  susceptible  of  ascer- 
tainment and  so  certain,  because  id  cerium  est  quod  cerium 
reddi  potest.  It  is  immaterial  what  method  or  means  are  em- 
ployed, provided  the  method  or  means  employed  will  result  in 
fixing  the  price  with  requisite  certainty.  It  is  said  that  "  the 
omisison  of  the  particular  mode  or  time  of  payment,  or  even 
of  the  price  itself,  does  not  necessarily  invalidate  a  contract  of 
sale.  Goods  may  be  sold,  and  frequently  are  sold,  when  it  is 
the  intention  of  the  parties  to  bind  themselves  by  a  contract 
which  does  not  specify  the  price  or  the  mode  of  payment, 
leaving  them  to  be  settled  by  some  future  agreement,  or  to  be 
determined  by  what  is  reasonable  under  the  circumstances." 
(Valpy  v.  Gibson,  4  C.  B.  837,  864.)  The  parties  may  agree 
upon  a  sale,  and  may  agree  to  leave  the  price  to  be  fixed  by 
future  agreement.  In  such  case  title  would  undoubtedly  pass 
from  seller  to  buyer,  but  if  they  subsequently  failed  to  agree 
upon  the  price,  and  the  buyer  kept  or  consumed  or  other- 
wise disposed  of  the  goods,  a  quasi-contractual  obligation 
would  follow,  and  the  buyer  would  be  compelled  to  pay  their 
reasonable  value.  (See,  also,  sub-section  4  of  section  9  of 
the  Uniform  Sales  Act.)  If,  however,  as  stated  in  Valpy  v. 
Gibson,  supra,  the  parties,  agreeing  upon  a  sale,  should  leave 
the  price  "  to  be  settled  by  some  future  agreement,  or  to  be 
determined  by  what  is  reasonable  under  the  circumstances," 
then,  failing  of  future  agreement,  and  having  expressly  pro- 
vided an  alternative  mode  or  method,  viz.,  "  by  what  is  reason- 


ESSENTIALS  A.ND  DISTINCTIONS.  19 

able  under  the  circumstances,"  a  jury  may  determine  accord- 
ing to  the  agreed  method. 

"  The  rule  as  to  price,  in  executory  contracts  of  sale,  is 
generally  said  to  be,  that  it  must  be  certain,  or  capable  of 
being  made  certain.  Such  is  undoubtedly  the  settled  doctrine, 
and  although,  in  such  case,  if  the  agreement  be  that  it  is  to  be 
fixed  by  arbitration,  the  sale  must  be  considered  void  if  the 
arbitrators  fail  to  agree,  a  different  principle  prevails  where 
the  contract  of  sale  is  complete  and  executed.  In  the  latter 
class  of  contracts,  where  the  seller,  whether  by  actual  delivery 
or  other  like  unequivocal  act,  intentionally  passes  the  prop- 
erty in  specific  goods  to  the  purchaser,  without  fixing  the 
price,  the  law  leaves  the  price  to  be  adjusted  by  the  agree- 
ment of  the  parties,  or,  if  they  fail  to  agree,  by  the  verdict  of 
a  jury.  If  such  price  is  left  open  for  future  adjustment  by 
consent,  the  property  being  delivered  with  the  expressed  in- 
tention to  complete  the  sale,  the  price  to  be  agreed  on  is  im- 
plied to  be  one  that  is  fair  and  reasonable,  and  this  is  always 
the  rule  of  recovery  on  a  quantum  meruit,  or  quantum  vale- 
bat.  If  there  should  or  can  be  no  mutual  consent,  the  impli- 
cation follows,  as  part  of  the  original  contract  of  sale,  that  a 
jury  will  adjust  it,  just  as  manifestly  as  in  every  day  sales 
and  delivery  of  goods  by  merchants  on  open  account,  where 
the  price  is  very  often  not  adjusted  for  months  afterwards." 
(Shealy  v.  Edwards,  73  Ala.  175,  181.) 

The  price,  therefore,  may,  at  the  time  of  the  bargain,  be 
expressly  fixed  in  a  sum  certain  by  the  parties,  or  means  for 
its  ascertainment  may  then  be  fixed,  as  the  market  price  on  a 
certain  day  (Phifer  v.  Erwin,  100  K.  C.  59),  or  ten  cents 
less  than  the  market  price  on  any  day  thereafter  which  the 
seller  should  name  (McConnell  v.  Hughes,  29  Wis.  537),  or 
by  being  left  to  the  valuation  of  a  third  party  (Brown  v. 
Bellows,  4  Pick.  189 ;  Norton  v.  Gale,  95  111.  533),  or  it  may 
be  impliedly  left  to  be  determined  by  the  course  of  dealing 
between  the  parties  (Valpy  v.  Gibson,  4  C.  B.  837,  864;  U.  8. 
v.  Wilkins,  6  Wheat.  135;  Taft  v.  Travis,  136  Mass.  95, 
102),  or  by  what  is  reasonable  under  the  circumstances. 


20  SUMMARY  OF  SALES. 

(Valpy  v.  Gibson,  4  C.  B.  837,  864;  Shealy  v.  Edwards,  73 
Ala.  175;  Taft  v.  Travis,  136  Mass.  95.) 

Reasonable  price. — "  What  is  a  reasonable  price,"  even  as 
stated  in  sub-section  4  of  section  9  of  tbe  Uniform  Sales  Act, 
"  is  a  question  of  fact  dependent  on  the  circumstances  of 
each  particular  case." 

The  market  price  at  the  time  and  place  fixed  for  the  de- 
livery of  the  goods  ordinarily  determines  the  reasonable  value 
(Konitzky  v.  Meyer,  49  N.  Y.  571 ;  DeutscJi  v.  Pratt,  149 
Mass.  415 ;  McEwen  v.  Morey,  60  111.  32 ;  Althouse  v.  Alvord, 
28  Wis.  577),  because  "ordinarily,  when  an  article  of  sale 
is  in  the  market,  and  has  a  market  value,  there  is  no  difference 
between  its  value  and  the  market  price,  and  the  law  adopts 
the  latter  as  the  proper  evidence  of  the  value.  This  is  not, 
however,  because  value  and  price  are  really  convertible  terms, 
but  only  because  they  are  ordinarily  so  in  a  fair  market.  The 
primary  meaning  of  value  is  worth,  and  this  worth  is  made 
up  of  the  useful  or  estimable  qualities  of  the  thing.  (See 
Webster's  and  Worcester's  Dictionaries.)  Price,  on  the  other 
hand,  is  the  sum  in  money  or  other  equivalent  set  upon  an 
article  by  a  seller,  which  he  demands  for  it.  (Id.  Ibid.) 
Value  and  price  are,  therefore,  not  synonymous,  or  the  neces- 
sary equivalents  of  each  other,  though  commonly,  market 
value  and  market  price  are  legal  equivalents.  .  . 

"  It  is  equally  obvious,  when  we  consider  its  true  nature, 
that  as  evidence,  the  market  price  of  an  article  is  only  a 
means  of  arriving  at  compensation ;  it  is  not  itself  the  value 
of  the  article,  but  is  the  evidence  of  value.  The  law  adopts 
it  as  a  natural  inference  of  fact,  but  not  as  a  conclusive  legal 
presumption.  It  stands  as  a  criterion  of  value,  because  it  is 
a  common  test  of  the  ability  to  purchase  the  thing."  (Eountz 
v.  KirTcpatricTc,  72  Pa.  St.  376,  386.) 

"  Evidence  as  to  the  price  need  not  be  confined  to  the  pre- 
cise time  when  the  contract  was  to  have  been  performed.  It 
may  sometimes  be  impracticable  to  show  the  price  at  the 
precise  time,  and  hence  evidence  of  the  price  for  a  brief 


ESSENTIALS  AND  DISTINCTIONS.  21 

period  before  and  after  the  time  may  be  given,  not  for  the 
purpose  of  establishing  a  market  price  at  any  other  time,  but 
for  the  purpose  of  showing  as  well  as  practicable  the  market 
price  on  the  day  the  contract  was  to  have  been  performed. 
So  it  may  not  always  be  practicable  to  show  the  price  at  the 
precise  place  of  delivery.  There  may  have  been  no  sales  of 
the  commodity  there,  and  hence  evidence  of  the  price  at  places 
not  distant,  or  in  other  controlling  markets  may  be  given, 
not  for  the  purpose  of  establishing  a  market  price  at  any  other 
place,  but  for  the  purpose  of  showing  the  market  price  at  the 
place  of  delivery."  (Cohen  v.  Platt,  69  N.  Y.  348,  352.) 
The  market  price  will  not,  therefore,  always  determine  the 
reasonable  price,  as  what  is  reasonable  "  may,  or  may  not, 
agree  with  the  current  price  of  the  commodity  at  the  port  of 
shipment,  at  the  precise  time  when  such  shipment  is  made. 
The  current  price  of  the  day  may  be  highly  unreasonable 
from  accidental  circumstances,  as  on  account  of  the  com- 
modity having  been  purposely  kept  back  by  the  vendor  him- 
self, or  with  reference  to  the  price  at  other  ports  in  the  imme- 
diate vicinity,  or  from  various  other  causes."  (Acebal  v. 
Levy,  10  Bing.  376,  383.)  Therefore,  if  it  appear  that  the 
market  price  was  unduly  inflated  or  depressed  at  the  time 
and  place  fixed  for  the  delivery  of  the  goods,  the  market 
price  will  not  be  the  criterion  of  what  is  reasonable  price  or 
value.  (Smith  v.  Griffith,  3  Hill,  333;  Kountz  v.  Kirk- 
patrick,  72  Pa.  St.  376;  Lovejoy  v.  Michels,  88  Mich.  15.) 

Essential  elements.— The  essential  elements,  therefore, 
are,  (1)  competent  parties,  (2)  mutual  assent,  (3)  general 
property  in  a  thing  the  subject  of  transfer,  and  (4)  price  in 
money. 

In  order  to  avoid  repetition,  we  may  leave  the  detailed 
discussion  of  "  competency  of  parties,"  "  mutual  assent  "  and 
"  consideration  "  to  the  law  of  persons  and  of  pure  contract, 
respectively,  and  confine  our  attention  to  the  paramount  pur- 
pose in  "  sale  "  and  in  "  contract  to  sell,"  viz.,  the  Transfer 
of  Title;  and  thereafter  to  Warranty,  sometimes,  but  not 


22  SUMMABY    OF    SALES. 

always,  accompanying ;  to  so  much  of  the  Statute  of  Frauds, 
a  statute  of  only  evidentiary  and  procedural  value,  as  relates 
to  contracts  to  sell  and  to  sales  of  personal  property;  and  to 
the  Remedies  of  Seller  and  Buyer,  first  distinguishing,  how- 
ever, sales  from  some  seemingly  similar,  yet  distinct,  trans- 
actions. 

Exchange. — As  in  sale  and  in  contract  to  sell,  so  in  ex- 
change and  in  contract  to  exchange,  the  transfer  of  the  abso- 
lute property  in  goods  is  what  is,  or  is  to  be,  effected.  Sales 
differ  from  exchanges  in  that  the  consideration  in  the  former 
is  expressed  in  money  or  in  money  terms  {Harris  v.  Fowle 
cited  in  Barbe  v.  Parker,  1  H.  Bl.  287 ;  Herrick  v.  Carter, 
56  Barb.  41 ;  Gunter  v.  Leckey,  30  Ala.  596 ;  Loomis  v.  Wain- 
wright,  21  Vt.  520;  Picard  v.  McCormick,  11  Mich.  68), 
while  in  the  latter  the  consideration  consists  of  other  goods 
without  money  valuation  (Fuller  v.  Duren,  36  Ala.  73),  but 
"  the  distinction  between  a  sale  and  exchange  of  property  is 
rather  one  of  shadow  than  of  substance.  In  both  cases  the 
title  to  property  is  absolutely  transferred,  and  the  same  rules 
of  law  are  applicable  to  the  transaction,  whether  the  considera- 
tion of  the  contract  is  money  or  by  way  of  barter.  It  can 
make  no  essential  difference  in  the  rights  and  obligations  of 
parties  that  goods  and  merchandise  are  transferred  and  paid 
for  by  other  goods  and  merchandise  instead  of  by  money, 
which  is  but  the  representative  of  value  or  property."  (  Com- 
monwealth v.  Clark,  14  Gray,  3 07,  372.)  See,  also,  Hudson 
Iron  Co.  v.  Alger,  54  N.  Y.  173. 

Under  the  Sale  of  Goods  Act  (sub-section  1  of  section  1), 
however,  money  consideration  still  distinguishes  a  sale  from 
an  exchange,  but  in  the  Uniform  Sales  Act  (sub-section  2  of 
section  9)  this  distinction  is  abandoned. 

When  a  statute  refers  in  terms  to  a  "  sale,"  it  has  been 
held  not  to  include  an  exchange  (Massey  v.  State,  74  Ind. 
368 ;  State  v.  Mercer,  32  la.  405 ;  Rickart  v.  People,  79  111. 
85)  ;  but  the  weight  of  authority  in  this  country  seems,  in 
such  case,  to  disregard  any  distinction,  and  to  treat  exchange 


ESSENTIALS  AND  DISTINCTIONS.  23 

as  included  in  the  term  "  sale."  (Misner  v.  Strong,  181  N.  Y. 
163,  168;  Franklin  v.  Matoa,  etc.,  Go.,  158  Fed.  Rep.  941; 
Commonwealth  v.  Clark,  14  Gray,  367 ;  Howard  v.  Harris, 
8  Allen,  297 ;  Dowling  v.  McKenney,  124  Mass.  478 ;  Gor- 
man v.  Brossard,  120  Mich.  611;  Rutan  v.  Hinchman,  30 
K  J.  Law,  255;  Wallace  v.  Long,  105  Ind.  522.) 

Distinction  between  sale  and  exchange,  material  when. — 
The  distinction  between  sale  and  exchange  is  mainly  material 
in  the  matter  of  pleading.  Under  the  common-law  system  of 
pleading,  "  where  one  party  agrees  to  do  a  certain  thing,  and 
the  other  party  agrees  to  pay  a  sum  of  money,  and  the  thing 
or  duty  is  performed,  an  action  lies  for  the  money,  because  a 
debt  has  accrued,  and  nothing  remains  to  be  done  but  to  pay 
it,"  but  "  where  goods  are  sold  to  be  paid  for  wholly  or  in 
part  by  other  goods,  or  by  the  defendant's  labor,  or  otherwise 
than  in  money,  the  action  must  be  on  the  agreement,  and  for 
a  breach  of  it,  and  not  for  goods  sold  and  delivered." 
(Mitchell  v.  Gile,  12  K  H.  390,  391,  392.) 

The  distinction  between  sale  and  exchange  has  also  been 
observed  in  the  right  to  waive  tort  and  sue  in  assumpsit, 
where  the  defendant  has  disposed  of  goods,  belonging  to  the 
plaintiff,  by  sale,  but  not  if  he  disposed  of  them  by  exchange 
(Fuller  v.  Duren,  36  Ala.  73) ;  and  also  in  case  of  authority 
to  sell,  which  does  not  include  an  authority  to  exchange. 
(Taylor,  etc.,  Co.  v.  Starkey,  59  N.  H.  142.)  See,  also, 
Williston  on  Sales,  §  170. 

Exchange :  Roman  law.— "  It  was  long  a  moot  point  be- 
tween two  rival  schools  of  Roman  jurists,  the  Sabinians  and 
the  Proculians,  whether  the  contracts  of  exchange  (permu- 
tatio)  and  of  sale  (emptio-venditio}  were  essentially  differ- 
ent. Gaius  (3,  141),  professing  to  be  a  Sabinian,  maintained 
from  a  purely  historical  point  of  view  that  barter  was  merely 
the  more  ancient  form  of  sale,  in  support  of  which  he  cited 
a  passage  of  Homer  (II.  7,  472-475).  Another  school  main- 
tained the  negative,  on  the  ground  that  it  could  not  be  deter- 
mined which  was  the  thing  sold,  and  which  was  the  price,  and 


24  SUMMARY  OF  SALES. 

that  it  was  absurd  that  a  thing  should  be  both;  and  this 
opinion  prevailed,  being  supported  by  other  passages  of 
Homer  (e.  g.,  Od.  1,  430),  and  as  being  more  in  accordance 
with  sound  reason.  The  question  was  finally  disposed  of  by 
a  rescript  (Code  4,  64,  7)  of  the  Emperors  Diocletian  and 
Maximian  in  A.  D.  294,  which  was  adopted  by  Justinian 
(Inst.  3,  23,  2).  Price  being  therefore  held  to  be  of  the 
essence  of  the  contract  of  sale,  barter  was  relegated  to  the 
class  of  real  contracts.  The  distinction  was  important,  as  a 
contract  of  exchange,  not  being  a  consensual  contract  (by  the 
French  Civil  Code,  however,  exchange  is  a  consensual  con- 
tract: Arts.  1703-7),  was  enforceable  only  after  a  part  per- 
formance by  the  party  seeking  relief.  A  contract  of  barter, 
therefore,  so  long  as  it  was  executory  on  both  sides,  was  not 
enforceable  in  the  absence  of  a  stipulatio  (Code  4,  64,  3; 
Dig.  19,  4,  1,  2).  To  this  rule,  according  to  Gaius  (3,  141, 
adopted  by  Code  4,  64,  1),  one  exception  only  was  allowed, 
and  the  transaction  treated  as  a  sale,  namely,  where  a  person 
had  a  thing  for  sale,  and  another,  '  pretii  nomine/  gave 
another  thing  for  it;  the  reason  of  the  exception  obviously 
being,  that  in  this  case  it  could  be  determined  which  of  the 
two  things  was  sold  and  which  was  the  price."  (Benjamin 
on  Sales  [5th  Eng.  ed.],  6.) 

Bailment. —  In  a  sale,  the  general  or  absolute  property  in 
goods  is  transferred,  while  in  bailment  only  a  special  property 
therein  is  transferred.  In  a  sale,  there  must  be  agreement, 
expressed  or  implied,  to  pay  the  purchase  price,  while  in  bail- 
ment, if  for  hire,  there  must  be  payment  for  the  use.  (Hery- 
ford  v.  Davis,  102  U.  S.  235.  )J 

11  The  distinction  between  a  bailment  and  a  sale  is  correctly 
laid  down  by  Bronson,  chief  judge,  in  Mallory  v.  Willis,  4 
Comst.  85,  in  these  words :  '  When  the  identical  thing  de- 
livered, although  in  an  altered  form,  is  to  be  restored,  the 
contract  is  one  of  bailment  and  the  title  to  the  property  is  not 
changed ;  but  when  there  is  no  obligation  to  restore  the  specific 
article,  and  the  receiver  is  at  liberty  to  restore  another  thing 


ESSENTIALS  AND  DISTINCTIONS.  25 

of  equal  value,  he  becomes  a  debtor  to  make  the  return,  and 
the  title  to  the  property  is  changed :  it  is  a  sale."  (Foster  v. 
Pettibone,  7  N.  Y.  433,  435.)  See,  also,  Union  Stock-Yards, 
etc.,  Co.  v.  Western  Land,  etc.,  Co.,  59  Fed.  Rep.  49,  53; 
Sturm  v.  Boker,  150  U.  S.  312,  329 ;  Mansfield  v.  Converse, 
8  Allen,  182.  If,  however,  the  identical  goods,  though  in 
altered  form,  are  not  to  be  returned,  but  other  goods,  or  goods 
with  valuation  fixed,  or  money  is  to  be  returned,  the  party 
under  obligation  becomes  debtor  therefor,  and  the  transaction 
will  be  exchange  or  sale,  as  the  case  may  be.  (Norton  v. 
Woodruff,  2  N.  Y.  153 ;  Butterfield  v.  Lathrop,  71  Pa.  St. 
225;  Powder  Co.  v.  Burkhardt,  97  U.  S.  110.) 

Pledge. — Where  goods  are  pledged  by  way  of  security, 
the  general  or  absolute  property  remains  in  the  pledgor,  and 
only  a  so-called  special  property  —  strictly  speaking,  an 
authority  —  is  transferred  to  the  pledgee.  (Parshall  v. 
Eggert,  54  N".  Y.  18;  Ex  parte  Hublard,  17  Q.  B.  Div.  690.) 
Delivery  of  possession  is  essential  in  pledge,  in  order  to  trans- 
fer said  special  property,  but  it  is  not  always  necessary  in 
sale  in  order  to  transfer  the  general  or  absolute  property  to 
the  purchaser.  The  transaction  is  therefore  a  bailment,  and 
so  continues  until  the  pledge  is  returned  to  the  pledgor  upon 
payment  by  him  of  the  debt,  or  performance  of  the  obligation, 
for  which  the  goods  were  pledged  as  security,  or  until  the 
pledgee,  upon  default  by  the  pledgor,  exercises  his  authority 
or  power  to  sell  the  pledge  to  satisfy  his  claim,  when  the 
general  or  absolute  property  of  the  pledgor  therein  is  trans- 
ferred to  the  purchaser.  (Cortelyou  v.  Lansing,  2  Caines 
Cas.  202;  Whitaker  v.  Sumner,  20  Pick.  405;  Houser  v. 
Kemp,  3  Pa.  St.  208;  Shaw  v.  Wiltshire,  65  Me.  485.) 

Consignment. —  Where  goods  are  consigned  to  a  factor  or 
general  commission  merchant  for  sale,  only  a  so-called  special 
property  in  the  goods  is  transferred,  notwithstanding  the  pur- 
pose is  not  to  return  the  identical  goods,  but  to  sell  them  on 
behalf  of  the  consignor.  The  consignee  has,  of  course,  a  lien 


26  SUMMARY  OF  SALES. 

for  his  charges  and  advances,  possible  only  when  the  general 
property  in  the  goods  is  in  the  consignor,  until  the  goods  are 
sold,  when  the  moneys  received  from  the  sale  take  the  place 
of  the  goods,  subject  to  his  lien  as  before,  and  subject,  even 
as  the  goods  themselves  were  before  they  were  sold,  to  return 
at  the  request  of  the  consignor  upon  satisfaction  of  the  lien, 
if  any  there  be.  The  same  is  true  of  a  consignment  under  a 
del  credere  commission.  (Morse  v.  Stone,  5  Barb.  516;  Mel- 
drum  v.  Snow,  9  Pick.  441 ;  Walker  v.  Buttrick,  105  Mass. 
237;  Boston,  etc.,  Co.  v.  Warrior  Mower  Co.,  76  Me.  251.) 
Such  transaction  is  therefore  a  bailment  with  authority  to  sell. 
If,  however,  goods  are  consigned  at  a  fixed  price,  with  the 
intention  of  making  the  consignee  primarily  liable  without 
regard  to  the  price  obtained  by  the  latter  therefor,  and  are 
so  accepted  by  the  consignee,  the  transaction  is  a  sale  and 
not  a  bailment.  (Ex  parte  White,  L.  R.  6  Ch.  397;  Jordan 
v.  Easter,  2  111.  App.  73.) 

Bailment  with  privilege  of  purchase. —  If  goods  are  de- 
livered for  the  purpose  of  trial  or  inspection,  upon  the  under- 
standing that,  if  they  prove  satisfactory,  the  bailee  will  keep 
them  and  pay  a  certain  price  therefor,  the  transaction  is  a 
bailment  until  the  bailee  elects  to  keep  them,  when  the  bail- 
ment ends,  and  sale  takes  place.  This  is  sometimes,  but  in- 
accurately, called  a  "  sale  on  approval."  But  there  is  no  sale, 
not  even  a  contract  to  sell,  until  the  bailee  elects  to  keep  the 
goods,  and  not  until  then  is  the  absolute  property  trans- 
ferred, with  approval  only  a  thing  —  not  a  condition  prece- 
dent —  of  the  past.  Of  course,  the  parties  may  expressly 
agree  contrariwise,  but  unless  their  intention  is  otherwise 
manifested,  the  law  will  construe  their  intention  in  favor  of 
bailment,  and  not  in  favor  of  sale.  (Whitehead  v.  Vander- 
lilt,  10  Daly,  214;  Hunt  v.  Wyman,  100  Mass.  198;  Dando 
v.  Foulds,  105  Pa.  St.  74;  Wilson  v.  Stratton,  47  Me.  120; 
Kahn  v.  Cldbrunda,  50  Wis.  235 ;  Re  Froelich  Rubber  Co., 
139  Fed.  Rep.  201;  O'Donnell  v.  Wing,  121  Ga.  717.) 


ESSENTIALS  AND  DISTINCTIONS.  27 

Sale  or  return.— A  bailment  with  privilege  of  purchase, 
or  so-called  "  sale  on  approval,"  must  be  distinguished  from 
what  is  commonly  called  "  sale  or  return"  in  which  the  par- 
ties agree  upon  a  present  transfer  of  the  absolute  property  in 
goods  for  a  price,  with  a  privilege  in  the  buyer  of  returning 
the  goods,  if  they  prove  unsatisfactory.  In  such  a  trans- 
action, the  title  passes  immediately,  subject  to  reverter,  how- 
ever, if  the  purchaser,  under  his  privilege,  elects  to  return  the 
goods.  (Sturm  v.  Eoker,  150  U.  S.  312;  Foley  v.  Felrath, 
98  Ala.  176 ;  Lynch  v.  Willford,  57  Minn.  377.)  "An  option 
to  purchase  if  he  liked  is  essentially  different  from  an  option 
to  return  a  purchase  if  he  should  not  like.  In  one  case  the 
title  will  not  pass  until  the  option  is  determined ;  in  the  other 
the  property  passes  at  once,  subject  to  the  right  to  rescind  and 
return."  (Hunt  v.  Wyman,  100  Mass.  198,  200.) 

Option  must  be  exercised  when. —  In  case  of  "sale  or 
return  "  and  of  so-called  "  sale  on  approval,"  the  transferee 
must  by  word  or  act,  within  the  time  fixed  for  the  exercise  of 
his  option,  and,  if  no  time  is  fixed,  within  a  reasonable  time, 
express  his  willingness,  the  one,  to  return  the  goods,  the 
other,  to  keep  the  goods,  and  thereby  exercise  his  option.  In 
Hunt  v.  Wyman,  100  Mass.  198,  the  plaintiff,  after  naming 
$250  as  the  price  of  his  horse,  in  response  to  a  query  thereto 
by  the  defendant,  allowed  the  defendant  to  take  it  upon  the 
latter's  saying,  "  Let  me  take  the  horse  and  try  it ;  if  I  do 
not  like  it,  I  will  return  it  to-night  in  as  good  condition  as 
I  get  it."  The  court,  at  page  200,  said:  "A  mere  failure 
to  return  the  horse  within  the  time  agreed  may  be  a  breach 
of  contract,  upon  which  the  plaintiff  is  entitled  to  an  appro- 
priate remedy;  but  has  no  such  legal  effect  as  to  convert 
the  bailment  into  a  sale.  It  might  be  evidence  of  a  determina- 
tion, by  the  defendant,  of  his  option  to  purchase.  But  it 
would  be  only  evidence,"  because  mere  retention  might  result 
from  some  cause  other  than  a  willingness  to  take  title.  Under 
the  Uniform  Sales  Act,  however,  [section  19,  rule  3,  (2)  (b)] 


28  SUMMARY  OF  SALES. 

retention  for  any  reason  beyond  the  time,  whether  fixed  or 
reasonable,  is  assent. 

"  Frequently  in  bargains  of  this  sort  [so-called  '  sales  on 
approval '],  the  contract  does  not  fix  a  time  for  the  approval 
to  be  signified  but  states  only  the  period  of  trial  to  be 
allowed.  According  to  the  better  view  this  cannot  be  con- 
strued as  requiring  the  buyer  to  signify  his  approval  or 
acceptance  within  the  time  allowed  him  for  trial.  He  may 
use  the  full  period  for  trial,  and  exercise  his  option  with 
reasonable  promptitude  thereafter.  (Springfield  Engine  Stop 
Co.  v.  Sharp,  184:  Mass.  266.)  The  case  is  to  be  contrasted 
with  that  of  a  sale  with  a  right  of  return.  In  the  latter  case 
a  named  period  will  be  the  extreme  limit  for  the  return." 
(Williston  on  Sales,  §  272.)  Of  course,  if  the  period  of  trial 
alone  be  fixed,  we  must  perforce  fall  back  upon  reasonable 
time  for  acceptance,  simply  because  a  fixed  period,  only  for 
trial,  does  not  necessarily,  and  may  not  reasonably,  include 
acceptance  within  the  same  period.  If  the  period  for  return 
be  expressly  fixed  in  case  of  "  sale  or  return,"  the  goods,  of 
course,  must  be  returned  within  "  the  extreme  limit,"  or  the 
right  to  return  will  be  lost. 

Under  the  English  Act,  no  distinction  is  made  between 
"sale  or  return"  and  so-called  "sale  on  approval."  (Sale 
of  Goods  Act,  section  18,  rule  4.) 

Lease. — A  lease  proper  contemplates  the  use  of  property 
for  a  time,  with  possession  and  payment  for  the  use,  and  the 
ultimate  return  of  it  to  the  lessor.  A  so-called  "  conditional 
sale,"  involving  a  condition  precedent,  contemplates  the  ulti- 
mate purchase  for  a  price  by  the  party  to  whom  its  possession 
is  delivered,  with  right  meanwhile  to  its  use,  and  payment 
therefor  or  not,  as  the  parties  may  agree. 

"  Where  the  transaction  is  an  ordinary  case  of  hiring,  its 
real  character  is  not  hard  to  recognize.  (Smith  v.  Niles,  20 
Vt.  315.)  But  a  transaction,  which  is  substantially  a  sale, 
cannot  be  changed  into  a  lease,  merely  by  calling  the  peri- 
odical payments,  reni,  if  on  the  last  payment  the  thing  is  to 


ESSENTIALS  AND  DISTINCTIONS.  29 

become  the  property  of  the  hirer.  If,  however,  there  is 
a  bona  fide  hiring,  with  the  privilege  of  purchase  at  a  given 
price,  over  and  above  the  periodical  payments,  then  the  trans- 
action does  not  become  a  sale,  until  the  additional  sum  is  paid, 
or  the  hirer  has  notified  the  owner  of  his  intention  to  buy. 
(Forest  v.  Nelson,  108  Pa.  St.  481;  Stadtfield  v.  Hunts- 
man, 92  Pa.  St.  53 ;  Brunswick  &  Balke  Co.  v.  Hoover,  95 
Pa.  St.  508;  Edward's  Appeal,  105  Pa.  St.  103.)  Parol 
evidence  is  admissible  to  show  the  real  character  of  the  trans- 
action, where  it  is  at  all  involved  in  doubt.  (Domestic  Sew- 
ing Machine  Co.  v.  Anderson,  23  Minn.  57 ;  Singer  Sewing 
Machine  Co.  v.  Holcomb,  40  Iowa,  33.) 

"  These  questions  have  arisen  lately  on  contracts  for  the 
disposition  of  organs,  pianos,  sewing  machines,  etc.,  under 
contracts  which  provide  for  the  payment  of  periodical  sums 
as  rent,  and  the  thing  is  to  become  the  property  of  the  other 
party  on  the  payment  of  the  last  installment  of  rent.  The 
courts  have  uniformly  held  these  contracts  to  be  sales,  and  not 
leases.  (Contra,  Sumner  v.  Cottey,  71  Mo.  121.)  In  some 
of  the  cases,  the  title  is  held  to  pass  immediately.  (Greer  v. 
Church,  13  Bush,  430;  March  v.  Wright,  46  111.  487;  Lucas 
v.  Campbell,  88  111.  447;  Singer  Mfg.  Co.  v.  Cole,  4  Lea, 
439 ;  Hervey  v.  R.  I.  Locomotive  Works,  93  U.  S.  663 ;  Price 
v.  McCallister,  3  Grant  Cas.  248.)  But  where  the  contract 
contains  the  express  stipulation,  as  most  of  them  do,  that  the 
title  shall  not  pass  until  the  last  payment,  the  transaction  is 
held  to  be  a  conditional  sale,  the  condition  being  precedent. 
Sargent  v.  Gile,  8  N.  H.  325 ;  Kohler  v.  Hayes,  41  Cal.  456 ; 
Singer  Mfg.  Co.  v.  Graham,  8  Or.  17 ;  Crist  v.  Kleber,  79 
Pa.  St.  290;  Enlow  v.  Klein,  79  Pa.  St.  488;  Goodell  v. 
Farebrother,  12  K.  I.  233;  Carpenter  v.  Scott,  13  K.  I.  474; 
Hine  v.  Roberts,  48  Conn.  267 ;  Loomis  v.  Bragg,  50  Conn. 
228;  Whitcomb  v.  Woodworth,  54  Vt.  544;  Collinder  Co. 
v.  Marshall,  57  Vt.  322;  Gibbons  v.  Luke,  37  Hun,  577." 
(Tiedeman  on  Sales,  §  9.)  See,  also,  Equitable  Providing 
Co.  v.  Potter,  22  Misc.  124;  Equitable  Providing  Co.  v. 
Eisentrager,  34  Misc.  179. 


30  SUMMARY  OF  SALES. 

For  provisions  applicable  to  conditions  and  reservations 
in  contracts  for  the  so-called  conditional  sale  of  chattels,  see 
the  New  York  Personal  Property  Law,  being  chap.  41  of  the 
Consolidated  Laws  of  1909,  §  62  et  seq. 

Mortgage  of  goods. —  A  chattel  mortgage  is  sometimes 
said  to  be  in  essence  a  "  conditional  sale,"  with  condition 
subsequent.  The  mortgagee  of  goods  became,  by  the  com- 
mon law,  the  transferee  of  the  title,  subject,  however,  to 
defeasance  upon  performance  by  the  mortgagor  of  the  con- 
ditions imposed  by  the  mortgage  (Brown  v.  Bement,  8  Johns. 
96)  ;  but,  if,  for  any  reason,  the  mortgagor  failed  to  perform 
the  conditions  imposed  by  the  mortgage,  the  mortgagee  be- 
came the  absolute  owner.  (Parshall  v.  Eggert,  52  Barb.  367.) 
He  might  thus  become  the  owner  of  goods  worth  four  times 
the  amount  of  the  mortgage  debt. 

Adherence  to  such  position  by  the  common  law,  resulting 
in  manifest  injustice  in  many  instances,  attracted  the  atten- 
tion of  the  court  of  chancery,  which,  after  a  long  struggle, 
acquired  jurisdiction  in  the  reign  of  James  I.,  and  decreed 
that  the  mortgagor  would  be  entitled  to  redeem,  after  con- 
dition broken,  upon  payment  of  the  debt  with  interest.  As 
this  right  of  redemption  was  recognized  only  in  a  court  of 
equity,  it  became  known  as  the  "  equity  of  redemption " 
(Patchin  v.  Pierce,  12  Wend.  61),  and,  in  the  absence  of 
statute,  is  still,  strictly  speaking,  an  equitable  remedy.  This 
right  of  redemption  marks  the  chief  distinction  between  a 
chattel  mortgage  and  a  "  conditional  sale,"  with  condition  sub- 
sequent, in  which  no  such  right  exists. 

The  chief  distinction  between  a  pledge  and  a  chattel  mort- 
gage lies  in  the  difference  of  location  of  title.  In  the  case 
of  pledge,  the  title  remains  in  the  pledger,  even  after  default, 
and  he  is  divested  of  title  only  upon  sale  by  the  pledgee  to 
satisfy  his  claim.  In  the  case  of  the  mortgagor,  he  is  di- 
vested of  title,  conditionally,  upon  the  execution  and  delivery 
of  the  mortgage,  and  absolutely,  upon  breach  of  the  con- 
dition, except  that  he  has  what  is  called  an  equity  of  redemp- 


ESSENTIALS  AND  DISTINCTIONS.  31 

tion.  Again,  the  validity  of  the  mortgage  is  not  affected  by 
the  mortgagor's  retention  of  the  possession  of  the  goods, 
while  transfer  of  possession  to  the  pledgee  is  essential  to  the 
validity  of  a  pledge. 

Contract  for  work  and  labor. —  Goods  to  be  manufactured 
and  goods  to  be  subsequently  acquired  are  future  goods,  and, 
as  we  have  seen,  contracts  for  the  sale  of  future  goods,  if 
there  be  no  intention  to  wager,  may  be  valid  contracts  to  sell, 
although  such  goods,  with  the  exception  of  goods  said  to  be 
in  potential  existence,  cannot  be  the  subject  of  a  present  sale. 
As  we  have  noticed  that  goods  said  to  be  in  potential  existence 
have  been,  except  under  the  Uniform  Sales  Act,  especially 
excepted  from  the  class  of  future  goods,  so  we  shall  find 
that  goods  to  be  manufactured  have  also  been  excepted,  even 
to  greater  extent,  some  jurisdictions  holding  that  if  the  seller, 
expressly  or  impliedly,  agrees  to  perform  work  and  labor 
thereon  before  the  goods  are  in  a  deliverable  condition,  the 
contract  is  one  for  work  and  labor,  and  is  not  a  contract  to 
sell;  but,  if  the  seller  agrees  to  sell  goods  which  are  to  be 
manufactured  by  another,  all  seemingly  agree  that  the  con- 
tract then  is  a  contract  to  sell,  and  not  a  contract  for  work 
and  labor.  As  this  distinction  is  most  frequently  noticed  in 
connection  with  the  Statute  of  Frauds,  it  will  be  considered 
later  under  the  subject  of  "  sale  "  in  connection  with  that 
statute. 

Contract  for  work  and  labor :  Roman  law. — "  By  the  civil 
law,  if  the  employer  furnished  the  materials  for  the  making 
of  a  chattel  the  contract  was  a  conductio  operis  faciendi  by 
the  workman;  if  the  workman  supplied  the  materials  the 
contract  was  emptio  et  venditio.  The  latter  point  was  settled 
by  Justinian  contrary  to  the  opinion  of  Cassius,  who  thought 
the  contract  was  a  mixed  one  of  labor  and  of  sale.  (Inst.  3, 
24,  4;  Dig.  18,  1,  20;  19,  2,  2,  1.)  Where  the  materials 
were  jointly  contributed,  the  contract  was  one  of  locatio  et 
conductio  if  the  employer's  were  the  principal  materials,  and 


32  SUMMARY  OF  SALES. 

emptio  et  venditio  if  the  principal  materials  were  the  work- 
man's. (Dig.  6,  1,  61;  18,  1,  20;  19,  2,  22,  2.)"  (Ben- 
jamin on  Sales  [5th  Eng.  ed.],  167.) 

Gift:  defined. — "A  gift  may  be  defined  as  a  voluntary 
transfer  of  his  property  by  one  to  another,  without  any  con- 
sideration or  compensation  therefor.  To  make  it  valid,  the 
transfer  must  be  executed,  for  the  reason  that,  there  being  no 
consideration  therefor,  no  action  will  lie  to  enforce  it."  (  Gray 
v.  Barton,  55  N.  Y.  68,  72.) 

Gift:  essential  elements. — "The  elements  necessary  to 
constitute  a  valid  gift  are  well  understood  and  are  not  the 
subject  of  dispute.  There  must  be  on  the  part  of  the  donor 
an  intent  to  give,  and  a  delivery  of  the  thing  given,  to  or  for 
the  donee,  in  pursuance  of  such  intent,  and  on  the  part  of  the 
donee,  acceptance.  The  subject  of  the  gift  may  be  chattels, 
choses  in  action,  or  any  form  of  personal  property,  and  what 
constitutes  a  delivery  may  depend  on  the  nature  and  situa- 
tion of  the  thing  given.  The  delivery  may  be  symbolical  or 
actual,  that  is,  by  actually  transferring  the  manual  custody 
of  the  chattel  to  tHe  donee,  or  giving  to  him  the  symbol  which 
represents  possession.  In  case  of  bonds,  notes  or  choses  in 
action,  the  delivery  of  the  instrument  which  represents  the 
debt  is  a  gift  of  the  debt,  if  that  is  the  intention ;  and  so,  also, 
where  the  debt  is  that  of  the  donee  it  may  be  given,  as  has 
been  held,  by  the  delivery  of  a  receipt  acknowledging  pay- 
ment. (Westerlo  v.  DeWitt,  36  K  Y.  340;  Gray  v.  Barton, 
55  id.  72;  2  Schouler  on  Pers.  Prop.,  §  66  et  seq.)  The 
acceptance,  also,  may  be  implied  where  the  gift,  otherwise 
complete,  is  beneficial  to  the  donee.  But  delivery  by  the 
donor,  either  actual  or  constructive,  operating  to  divest  the 
donor  of  possession  of  and  dominion  over  the  thing,  is  a  con- 
stant and  essential  factor  in  every  transaction  which  takes 
effect  as  a  completed  gift.  Anything  short  of  this  strips  it 
of  the  quality  of  completeness  which  distinguishes  an  inten- 
tion to  give,  which  alone  amounts  to  nothing,  from  the  con- 


ESSENTIALS  AND  DISTINCTIONS.  33 

summated  act,  which  changes  the  title."     (Beaver  v.  Beaver, 
117  K  Y.  421,  428.) 

Gift :  delivery,  history  of. — "  The  law  enunciated  by  Brae- 
ton  in  his  book  '  de  acquirendo  rerunl  dominio/  seems  clear 
to  the  effect  that  no  gift  was  complete  without  tradition  of 
the  subject  of  the  gift.  *  *  *  In  Brae  ton's  day,  seisin  was 
a  most  important  element  of  the  law  of  property  in  general ; 
and,  however  strange  it  may  sound  to  jurists  of  our  day 
and  country,  the  lawyers  of  that  day  applied  the  term  as 
freely  to  a  pig's  ham  (Select  Pleas  in  Manorial  Courts,  p.  142 
[2]  ;  see  also  Professor  Maitland's  papers  on  the  Seizin  of 
Chattels,  the  Beatitude  of  Seizin,  and  the  Mystery  of  Seizin ; 
Law  Quarterly  Rev.,  L,  324;  II.,  484;  IV.,  24,  286)  as  to 
a  manor  or  a  field.  At  that  time  the  distinction  between 
real  and  personal  property  had  not  yet  grown  up:  the  dis- 
tinction then  recognized  was  between  things  corporeal,  and 
things  incorporeal :  no  action  could  then  be  maintained  on  a 
contract  for  the  sale  of  goods,  even  for  valuable  considera- 
tion, unless  under  seal:  the  distinction  so  familiar  to  us 
now  between  contracts  and  gifts  had  not  fully  developed  it- 
self. The  law  recognized  seisin  as  the  common  incident  of 
all  property  in  corporeal  things,  and  tradition  or  the  delivery 
of  that  seisin  from  one  man  to  another  as  essential  to  the 
transfer  of  the  property  in  that  thing,  whether  it  were  land 
or  a  horse,  and  whether  by  way  of  sale  or  of  gift,  and 
whether  by  word  of  mouth  or  by  deed  under  seal.  This 
necessity  for  delivery  of  seisin  has  disappeared  from  a  large 
'part  of  the  transactions  known  to  our  law;  but  it  has  sur- 
vived in  the  case  of  feoffments.  Has  it  also  survived  in  the 
case  of  gifts  ?  *  *  *  Coming  next  to  the  great  law-writers 
of  the  reign  of  Edward  I.,  they  hold  language  substantially 
the  same  as  that  of  Bracton,  except  indeed  that  the  difference 
between  transactions  purely  voluntary,  or  for  pecuniary  con- 
sideration, appears  to  be  growing  somewhat  more  important. 
*  *  *  In  the  reign  of  Edward  IV.  a  step  seems  to  have 
been  taken  in  the  law  relative  to  gifts  which  resulted  in  this 

3 


34  SUMMARY  OF  SALES. 

modification :  that  whereas  under  the  old  law  a  gift  of  chattels 
by  deed  was  not  good  without  the  delivery  of  the  chattel 
given,  it  was  now  held  that  the  gift  by  deed  was  good  and 
operative  until  dissented  from  by  the  donee.  *  *  *  It 
was  in  the  reign  of  the  early  Tudors  that  the  action  on  the 
case  on  indebitatus  assumpsit  obtained  a  firm  foothold  in  our 
law ;  and  the  effect  of  it  seems  to  have  been  to  give  a  greatly 
increased  importance  to  merely  consensual  contracts.  It  was 
probably  a  natural  result  of  this  that,  in  time,  the  question 
whether  and  when  property  passed  by  the  contract  came  to 
depend,  in  cases  in  which  there  was  a  value  consideration, 
upon  the  mind  and  consent  of  the  parties,  and  that  it  was 
thus  gradually  established  that  in  the  case  of  bargain  and 
sale  of  personal  chattels,  the  property  passed  according  to  that 
mind  and  intention,  and  a  new  exception  was  thus  made  to 
the  necessity  of  delivery.  *  *  *  This  review  of  the 
authorities  leads  us  to  conclude  that  according  to  the  old  law 
no  gift  or  grant  of  a  chattel  was  effectual  to  pass  it  whether 
by  parol  or  by  deed,  and  whether  with  or  without  considera- 
tion unless  accompanied  by  delivery:  that  on  that  law  two 
exceptions  have  been  grafted,  one  in  the  case  of  deeds,  and 
the  other  in  that  of  contracts  of  sale  where  the  intention  of 
the  parties  is  that  the  property  shall  pass  before  delivery: 
but  that  as  regards  gifts  by  parol,  the  old  law  was  in  force 
when  Irons  v.  Smallpiece,  2  B.  &  A.  551,  was  decided:  that 
that  case  therefore  correctly  declared  the  existing  law." 
(Cochrane  v.  Moore,  25  Q.  B.  Div.  57,  64-67,  70,  72.) 

Gift:  delivery;  equitable  title. —  In  Grymes  v.  Hone,  49 
N".  Y.  17,  the  donor,  being  the  owner  of  120  shares  of  bank 
stock,  in  one  certificate,  made  an  absolute  assignment  in  writ- 
ing, under  seal  and  witnessed,  of  twenty  shares  thereof  to  the 
plaintiff,  his  favorite  granddaughter,  and  appointed  her  his 
attorney  irrevocable  to  sell  and  transfer  the  same  to  her  use. 
Afterwards,  he  handed  it  to  his  wife,  saying,  "  I  intend  this 
for  Nelly.  If  I  die,  don't  give  this  to  the  executors ;  it  isn't 
for  them,  but  for  Nelly ;  give  it  to  her,  herself."  The  donor 


ESSENTIALS  AND  DISTINCTIONS.  35 

was  at  that  time  about  80  years  of  age,  in  failing  health,  and 
so  continued  till  his  death.  The  plaintiff  then  brought  action 
against  the  executor  to  recover  said  twenty  shares  of  stock,  or 
their  value.  The  court,  at  p.  22,  said :  "  The  donor,  by 
this  assignment  and  power,  parted  with  all  his  interest  in 
the  stock  assigned  as  between  him  and  the  donee,  and  the 
donee  became  the  equitable  owner  thereof  as  against  every 
person  but  a  bona  fide  purchaser  without  notice.  Delivery  of 
the  stock  certificate  without  a  transfer  on  the  bank's  books 
would  have  made  no  more  than  an  equitable  title  as  against 
the  bank  (N.  Y.  &  N.  H.  R.  Co.  v.  Schuyler,  34  K  Y.  80, 
and  cases  cited),  though  it  would  give  a  legal  title  as  against 
the  assignor.  (McNeil  v.  Tenth  Nat.  Bank,  46  N.  Y.  325, 
just  decided,  and  according  to  the  case  of  Duffield  v.  Elwes, 
1  Bligh.  N.  S.  497,  530,  decided  in  the  House  of  Lords.) 
The  representatives  of  the  donor  were  trustees  for  the  donee 
by  operation  of  law  to  make  the  gift  effectual.  (See  also 
to  the  same  effect  Ex  parte  Pye,  18  Ves.  140 ;  Kekewich  v. 
Manning,  1  DeG.,  M.  &  G.  176 ;  Richardson  v.  Richardson, 
3  Eq.  Cas.  686.)  This  trust,  like  the  gift,  is  revocable  dur- 
ing the  donor's  life,  and  is  perfected  and  irrevocable  by  his 
death. 

"  This  extended  the  law  as  laid  down  by  Lord  Hardwicke, 
in  Ward  v.  Turner,  2  Ves.  Sr.  431,  442,  upon  this  subject, 
and  our  courts  have  gone  in  the  same  direction  with  Duffield 
v.  Elwes.  Where  notes  payable  to  the  donor's  order  and  not 
indorsed,  and  other  things  of  similar  character,  have  been 
given  mortis  causa,  courts  compel  the  representatives  of  the 
donor  to  allow  the  donee  to  sue  in  their  name,  though  the 
legal  title  has  not  passed.  (See  last  case;  Grover  v.  Grover, 
24  Pick.  261;  Chase  v.  Redding,  13  Gray,  418;  Bates  v. 
Kempton,  7  id.  382;  and  see  also  Westerlo  v.  DeWitt,  36 
N.  Y.  340;  Walsh  v.  Sexton,  55  Barb.  251.)" 

As  to  gifts  of  moneys  deposited  in  savings  banks  to  the 
credit  of  the  donor,  the  court,  in  Ridden  v.  Thrall,  125  N.  Y. 
572,  577,  says:  "  The  decisions  are  not  entirely  harmonious 
as  to  the  sufficiency  of  the  mere  delivery  of  such  deposit-books 


36  SUMMAEY    OF    SALES. 

to  constitute  a  valid  gift,  either  inter  vivos  or  causa  mortis. 
But  the  general  rule  in  England  and  in  this  country,  and 
particularly  in  this  state,  is  that  any  delivery  of  property 
which  transfers  to  the  donee  either  the  legal  or  equitable  title, 
is  sufficient  to  effectuate  a  gift;  and  hence  it  has  been  held 
that  the  mere  delivery  of  non-negotiable  notes,  bonds,  mort- 
gages or  certificates  of  stock  is  sufficient  to  effectuate  a  gift. 
[2  Eedfield  on  Wills,  312 ;  Westerlo  v.  DeWitt,  36  N.  Y.  340 ; 
Champney  v.  Blanchard,  39  id.  Ill;  Penfield  v.  Thayer,  2 
E.  D.  Smith,  305;  Walsh  v.  Sexton,  55  Barb.  251;  Johnson 
v.  Spies,  5  Hun,  468;  Allerton  v.  Lang,  10  Bosw.  362; 
Camp's  Appeal,  36  Conn.  88 ;  Bates  v.  Kempton,  7  Gray, 
382;  Chase  v.  Redding,  13  id.  418;  Pierce  v.  Boston  Savings 
Bank,  129  Mass.  425 ;  Tillinghast  v.  Wheaton,  8  K.  I.  536 ; 
In  re  Mead,  L.  K.  (15  Ch.  D.)  651;  Moore  v.  Moore,  L.  K. 
(18  Eq.)474.]  " 

Gift:  revocable  and  irrevocable,  when. — "Gifts  causa 
mortis  as  well  as  gifts  inter  vivos  are  based  upon  the  funda- 
mental right  everyone  has  of  disposing  of  his  property  as  he 
wills.  The  law  leaves  the  power  of  disposition  complete,  but 
to  guard  against  fraud  and  imposition,  regulates  the  methods 
by  which  it  is  accomplished. 

"  To  consummate  a  gift,  whether  inter  vivos  or  causa 
mortis,  the  property  must  be  actually  delivered  and  the  donor 
must  surrender  the  possession  and  dominion  thereof  to  the 
donee.  In  the  case  of  gifts  inter  vivos,  the  moment  the  gift 
is  thus  consummated  it  becomes  absolute  and  irrevocable. 
But  in  the  case  of  gifts  causa,  mortis  more  is  needed.  The  gift 
must  be  made  under  the  apprehension  of  death  from  some 
present  disease  or  some  other  impending  peril,  and  it  becomes 
void  by  recovery  from  the  disease  or  escape  from  the  peril. 
It  is  also  revocable  at  any  time  by  the  donor,  and  becomes 
void  by  the  death  of  the  donee  in  the  lifetime  of  the  donor." 
(Ridden  v.  Thrall,  125  N.  Y.  572,  579.) 


PART  II. 
THE  TRANSFER  OF  TITLE. 

Introductory. —  In  note  1  to  section  258  of  his  work  on 
Sales,  Professor  Williston  says :  "  The  word  '  property '  is 
used  [in  the  Uniform  Sales  Act]  as  in  the  English  act,  as 
meaning  title  as  between  the  parties.  In  portions  of  the  act 
which  deal  with  the  rights  of  third  persons,  .  .  .  the 
word  '  title  '  is  used  as  meaning  ownership  good  against  world. 
The  word  '  title '  is  in  most  American  cases  used  broadly  to 
express  both  meanings." 

The  words  "  property  "  and  "  title  "  will  be  used  inter- 
changeably herein  under  the  topic  of  "  The  Transfer  of 
Title,"  and  sub-headings  A  and  B  will  respectively  indicate 
consideration  thereof  as  between  the  parties,  and  as  to  third 
persons. 

A  As  between  the  parties : 

Sale  and  contract  to  sell. — "  It  is  a  rule  asserted  in  many 
legal  authorities,  but  which  may  be  quite  as  fitly  called  a 
rule  of  reason  and  logic  as  of  law,  that  in  order  to  an  exe- 
cuted sale,  so  as  to  transfer  a  title  from  one  party  to  another, 
the  thing  sold  must  be  ascertained.  This  is  a  self-evident 
truth,  when  applied  to  those  subjects  of  property  which  are 
distinguishable  by  their  physical  attributes  from  all  other 
things,  and,  therefore,  are  capable  of  exact  identification.  No 
person  can  be  said  to  own  a  horse  or  a  picture,  unless  he  is 
able  to  identify  the  chattel  or  specify  what  horse  or  what 
picture  it  is  that  belongs  to  him.  It  is  not  only  legally,  but 
logically,  impossible  to  hold  property  in  such  things,  unless 
they  are  ascertained  and  distinguished  from  all  other 
things;  and  this  I  apprehend  is  the  foundation  of  the  rule 
that,  on  a  sale  of  chattels,  in  order  to  pass  the  title,  the 
articles  must,  if  not  delivered,  be  designated,  so  that  posses- 

[37] 


38  SUMMARY  OF  SALES. 

sion  can  be  taken  by  the  purchaser  without  any  further  act 
on  the  part  of  the  seller."  (Comstock,  J.,  in  Kimberly  v. 
Patchin,  19  N.  Y.  330,  332.) 

"  Nothing  was  required  at  common  law  to  give  validity  to 
a  sale  of  personal  property  except  the  mutual  assent  of  the 
parties  to  the  contract.  As  soon  as  it  was  shown  by  com- 
petent evidence  that  it  was  agreed  by  mutual  assent  that  the 
one  should  transfer  the  absolute  property  in  the  thing  to  the 
other  for  a  money  price,  the  contract  was  considered  as 
completely  proven  and  binding  on  both  parties.  If  the  prop- 
erty by  the  terms  of  the  agreement  passed  immediately  to 
the  buyer,  the  contract  was  deemed  a  bargain  and  sale;  but 
if  the  property  in  the  thing  sold  was  to  remain  for  a  time  in 
the  seller,  and  only  to  pass  to  the  buyer  at  a  future  time  or 
on  certain  conditions  inconsistent  with  its  immediate  trans- 
fer, the  contract  was  deemed  an  executory  agreement." 
(Hatch  v.  Oil  Co.,  100  U.  S.  124,  130.) 

It  will  therefore  be  observed  that  "  the  right  of  property 
and  the  right  of  possession  are  distinct  from  each  other ;  the 
right  of  possession  may  be  in  one  person,  the  right  of  prop- 
erty in  another."  (Bayley,  J.,  in  Tarling  v.  Baxter,  6  B. 
&  C.  360.)  Therefore,  "  a  sale  of  a  specified  chattel  may  pass 
the  property  therein  to  the  vendee  and  vest  the  title  in  him 
without  delivery.  (See  Chitty  on  Contracts,  8th  American 
ed.,  p.  332,  and  Terry  v.  Wheeler,  25  N.  Y.  520.)"  Groat  v. 
Gile,  51  N.  Y.  431,  437.  That  is,  there  may  be  a  present 
transfer  of  the  property  in  specified  goods  from  vendor  to 
vendee,  without  any  transfer  of  the  physical  possession  of  the 
goods ;  but,  if  the  parties  make,  as  they  may,  delivery  of  the 
physical  possession  of  specified  goods  a  condition  precedent 
to  the  transfer  of  the  property  therein,  then,  of  course,  the 
property  therein  will  not  pass  from  vendor  to  vendee,  until 
such  delivery  is  made.  But,  "  sales  of  goods  not  specified 
stand  upon  a  different  footing,  the  general  rule  being  that  no 
property  in  such  goods  passes  until  delivery,  because  until 
then  the  very  goods  sold  are  not  ascertained."  (Hatch  v. 


THE  TRANSFER  OF  TITLE.  39 

Oil  Co.,  100  U.  S.  124,  132.)  That  is,  in  the  case  of  un- 
specified goods,  property  therein  will  not  pass  until  delivery 
of  the  physical  possession,  or  some  equivalent  thereof,  e.  g., 
appropriation  (Mitchell  v.  Le  Clair,  165  Mass.  308),  for 
until  then  the  goods  are  not  specified. 

See  sections  17  and  18  of  the  Uniform  Sales  Act. 

Intention  of  parties,  the  test. — "The  above,  relating  to  the 
present  transfer  of  property  in  specified  goods,  without  de- 
livery of  the  physical  possession,  was  not  always  the  law.  At 
first,  delivery  of  the  physical  possession  was  a  prerequisite  to 
the  transfer  of  title  by  sale.  (See  "  Gift:  delivery,  history 
of"  ante,  p.  33.)  This  was  succeeded  by  the  payment  of  the 
price,  which  was  treated  as  the  equivalent  of  delivery  of 
possession.  (See  article  on  Parol  Contracts  Prior  to  As- 
sumpsit,  by  Professor  Ames,  8  Harvard  Law  Rev.  252, 
258.)  Later,  it  seems  to  have  been  the  common  understand- 
ing that  the  property  in  specified  goods  might  pass  from 
vendor  to  vendee,  even  without  delivery  of  possession  or 
payment  of  the  price,  provided  credit  was  extended  to  the 
vendee  (Noy's  Maxims,  c.  XLII.),  although  it  is  imme- 
diately thereafter  stated  in  the  Maxims,  seemingly  in  accord 
with  a  statement  by  Chief  Justice  Brian  (Y.  B.  18  Ed.  IV. 
21,  1)  that,  "  If  I  sell  my  horse  for  money,  I  may  keep  him 
until  I  am  paid,  but  I  cannot  have  an  action  of  debt  until  he 
be  delivered,  yet  the  property  of  the  horse  is  by  the  bargain  in 
the  bargainee  or  buyer;  but  if  he  does  presently  tender  me 
my  money,  and  I  do  refuse  it,  he  may  take  the  horse  or  have 
an  action  of  detainment.  And  if  the  horse  die  in  my  stable 
between  the  bargain  and  the  delivery,  I  may  have  an  action 
of  debt  for  my  money,  because  by  the  bargain  the  property 
was  in  the  buyer." 

But  now,  "  where  no  question  arises  under  the  statute  of 
frauds,  and  the  rights  of  creditors  do  not  intervene,  the  ques- 
tion whether  a  sale  is  completed  or  only  executory,  must 
usually  be  determined  upon  the  intent  of  the  parties  to  be 
ascertained  from  their  contract,  the  situation  of  the  thing 


40  SUMMARY  OF  SALES. 

sold,  and  the  circumstances  surrounding  the  sale.  The  parties 
may  settle  this  by  the  express  words  of  their  contract,  but  if 
they  fail  to  do  so,  we  must  determine  from  their  acts  whether 
the  sale  is  complete."  (Lingham  v.  Eggleston,  27  Mich.  324; 
326.)  That  is,  "  the  question  is  rather  one  of  intention  than 
of  strict  law,  the  general  rule  being  that  the  agreement  is 
just  what  the  parties  intended  to  make  it,  if  the  intent  can 
be  collected  from  the  language  employed,  the  subject-matter, 
and  the  attendant  circumstances."  (Hatch  v.  Oil  Co.,  100 
IT.  S.  124,  131.)  See,  also  Logan  v.  Le  Mesurier,  6  Moore 
P.  C.  116;  Burt  v.  Dutcher,  34  N".  Y.  493;  Cox  v.  Jack- 
son, 6  Allen,  108. 

The  question  of  intention  is  always  one  of  fact  (Empire 
State  Type  Founding  Co.  v.  Grant,,  114  N".  Y.  40,  44),  even 
when  it  is,  as  under  certain  circumstances  it  may  be,  deter- 
mined by  the  court,  subject,  however,  to  "  the  construction 
of  the  agreement;  for  the  law  professes  to  carry  into  effect 
the  intention  of  the  parties  as  appearing  from  the  agree- 
ment, and  to  transfer  the  property  when  such  is  the  intention 
of  the  agreement ;  not  before.  In  this,  as  in  other  cases,  the 
parties  are  apt  to  express  their  intentions  obscurely;  very 
often  because  the  circumstances  rendering  the  point  of  im- 
portance are  not  present  to  their  minds,  so  that  they  really 
had  no  intention  to  express.  The  consequence  is,  that  with- 
out absolutely  losing  sight  of  the  fundamental  point  to  be 
ascertained,  the  courts  have  adopted  certain  rules  of  con- 
struction which,  in  their  nature,  are  more  or  less  technical 
.  .  But  as  these  are  only  rules  for  the  construction  of 
the  agreement,  they  must  yield  to  anything  in  the  agreement 
which  clearly  shows  a  contrary  intention."  (Blackburn  on 
Sales,  120.) 

Rules  for  ascertaining  intention. —  Various  rules  have 
been  laid  down  as  rules  of  construction  for  ascertaining  the 
intention  of  the  parties,  but  no  one  set  of  rules  has  been 
uniformly  acquiesced  in  both  in  England  and  in  this  country, 
or  in  the  various  jurisdictions  of  this  country  alone.  Al- 


THE  TRANSFER  OF  TITLE.  41 

though  section  18  of  the  English  Sale  of  Goods  Act  and 
section  19  of  the  American  Uniform  Sales  Act  set  forth  such 
rules,  each  is  not  identical  or  in  perfect  accord  with  the 
other.  Therefore,  the  so-called  common-law  rules  will  be  con- 
sidered, and  conflict  thereunder  noted  in  course  of  their 
consideration. 

Unless  a  different  intention  (Decker  v.  Furniss,  14  "N.  Y. 
611,  615;  Sherwin  v.  Mudge,  127  Mass.  547,  549;  Brock  v. 
O'Donnell,  45  N.  J.  Law,  441,  443)  appears,  the  following 
are  rules  for  ascertaining  the  intention  of  the  parties  as  to  the 
time  at  which  the  property  in  the  goods  is  to  pass  to  the 
buyer : 

Rule  i.  Sale  of  specific  goods,  nothing  remaining  to  be 
done. — Where  there  is  an  unconditional  agreement  for  the 
sale  of  specific  goods,  in  a  deliverable  state,  the  property 
in  the  goods  passes  to  the  buyer  when  the  agreement  is 
made,  and  it  is  immaterial  whether  the  time  of  payment  or 
the  time  of  delivery,  or  both,  be  postponed. 

"  Modern  decisions  of  the  most  recent  date  support  the 
proposition  that  a  contract  for  the  sale  of  specific  ascertained 
goods  vests  the  property  immediately  in  the  buyer,  and  that 
it  gives  to  the  seller  a  right  to  the  price,  unless  it  is  shown 
that  such  was  not  the  intention  of  the  parties."  (Hatch  v. 
Oil  Co.,  100  U.  S.  124,  134.)  See  Tarling  v.  Baxter,  6 
B.  &  C.  360;  Olyphant  v.  Baker,  5  Denio,  379,  382;  Terry 
v.  Wheeler,  25  N.  Y.  520,  525 ;  Van  Brocklen  v.  Smeallie, 
140  N.  Y.  70,  72 ;  Morse  v.  Sherman,  106  Mass.  430,  433 ; 
Folsom  v.  Cornell,  150  Mass.  115,  119. 

"  Where  by  the  contract  itself  the  vendor  appropriates  to 
the  vendee  a  specific  chattel,  and  the  latter  thereby  agrees  to 
take  the  same  and  to  pay  the  stipulated  price,  the  parties, 
.,  are  thus  in  the  same  situation  as  they  would  be  after 
a  delivery  of  goods  under  a  general  contract,  for  the  reason 
that  the  very  appropriation  of  the  chattel  is  equivalent  to 
delivery  by  the  vendor,  and  the  assent  of  the  vendee  to  take 
the  specific  chattel  and  to  pay  the  price  is  equivalent  to  his 


42  SUMMARY  OF  SALES. 

accepting  possession."  (Hatch  v.  Oil  Co.,  100  U.  S.  124, 
132.)  See  Dixon  v.  Yates,  5  Barn.  &  Adol.  313,  340;  God- 
dard  v.  Binney,  115  Mass.  450,  455. 

"  There  can  be  no  doubt  that  a  man  may  sell  any  kind  of 
articles  in  bulk  so  as  to  pass  the  title.  (5  Met.  452;  5 
Johns.  395;  2  Barn.  &  C.  540.)  H<3  may  pass  the  title 
to  an  absent  or  a  present  thing  without  delivery ;  for,  as  be- 
tween vendor  and  vendee,  it  is  specification  and  not  delivery 
that  is  necessary  to  the  vesting  of  title.  (17  Ser.  &  R.  99; 
5  Watts,  201.)  This  is  and  always  has  been  the  law,  except 
in  cases  where  other  forms  have  been  prescribed  by  statute." 
(Winslow,  Lanier  &  Co.  v.  Leonard,  24  Pa.  St.  14,  16.) 

"A  word  of  warning,"  says  Professor  Williston  (Sales, 
§  264),  "  is  necessary,  however,  in  regard  to  cash  sales,  where 
the  property  does  not  pass  until  payment  of  the  price  unless 
the  condition  is  waived."  That  depends,  however,  upon  the 
meaning,  according  to  intention,  attaching  to  the  expression, 
"  cash  sale."  Undoubtedly,  the  parties  may  make  a  cash 
sale  of  specified  goods,  with  immediate  transfer  of  title,  but 
subject  to  the  seller's  lien  for  the  price,  i.  e.,  the  payment  of 
the  price  being  a  condition  precedent  only  to  the  transfer 
of  possession;  or,  they  may  make  a  contract  to  sett  specified 
goods  for  cash,  with  future  transfer  of  title,  the  seller's  reten- 
tion of  title  being  now  his  protection  for  the  price,  i.  e.,  the 
payment  of  the  price  being  a  condition  precedent  to  the  trans- 
fer of  title.  (Empire  State  Type  Founding  Co.  v.  Grant, 
114  N.  Y.  40.)  Under  early  law,  as  before  noted,  title 
could  not  pass  without  delivery,  or  payment,  or  extension  of 
credit,  but  now,  in  the  absence  of  other  manifestation  of 
intention,  "  where  the  goods  to  be  transferred  are  clearly 
specified  and  the  terms  of  sale,  including  the  price,  are 
explicitly  given,  the  property,  as  between  the  parties,  passes 
to  the  buyer  even  without  actual  payment  or  delivery." 
(Hatch  v.  Oil  Co.,  100  U.  S.  124,  131.)  Such  is  the  gen- 
erally accepted  rule,  although  "  it  is  often  said,  indeed,  that 
in  a  cash  sale  (and  all  sales  in  which  no  time  is  agreed  upon 
for  payment  are  prima  facie  cash  sales)  the  property  does  not 


THE  TBANSFEB  OF  TITLE.  43 

pass  until  payment,  and  some  cases  appear  so  to  hold.  It  is 
always  possible  for  the  parties  to  agree  that  the  property  shall 
not  pass  until  payment,  and  in  some  cases  a  stipulation  that 
the  buyer  shall  pay  cash  or  give  a  note  or  other  security  for  the 
price  may  be  interpreted  as  indicating  such  an  intention, 
while  in  other  cases  such  an  intention  may  be  indicated  by 
other  circumstances. 

"  In  many  of  the  cases,  where  it  is  said  that  the  property 
does  not  pass,  however,  the  question  involved  was,  not  whether 
the  property  had  passed,  but  whether  the  buyer  had  the  right 
to  possession."  (Tiffany  on  Sales  [2d  ed.],  123,  and  cases 
cited.) 

"  In  most  jurisdictions,  however,  a  contract  for  the  sale  of 
specific  goods  for  cash  on  delivery  is  treated  as  a  bargain  and 
sale,  unless  some  other  fact  appears  evincing  an  intention  that 
the  title  as  well  as  the  possession  shall  not  pass  unless  and 
until  the  price  is  paid.  This  fact  may  be  disclosed  by  evi- 
dence of  the  course  of  dealing  between  the  parties,  or  of  the 
conduct  of  the  parties  before  delivery  has  taken  place,  or  of 
an  option  to  the  buyer  to  pay  cash  or  to  perform  some  express 
condition  such  as  giving  approved  paper,  or  of  a  statement 
by  the  seller  during  the  negotiations  that  the  property  shall 
not  become  the  buyer's  unless  he  pays  cash.  In  most  of  the 
cases  where  cash  sales  have  been  spoken  of  as  conditional, 
some  such  additional  fact  has  appeared ;  or  the  question  really 
at  issue  has  been,  not  whether  title  had  passed,  but  whether 
the  buyer  was  entitled  to  possession."  (Burdick  on  Sales 
[2d  ed.],  48,  and  cases  cited.) 

Rules  2  and  3,  following,  "  of  which  there  is  no  trace  in 
the  Reports  before  the  time  of  Lord  Ellenborough,  are  laid 
down  since  the  time  of  that  learned  judge  as  rules  of  English 
law,  in  terms  nearly  equivalent  to  those  in  which  they  are 
laid  down  as  rules  of  civil  law."  (Blackburn  on  Contract  of 
Sale  [2ded.],l74.) 

Rule  2.  Goods  to  be  put  into  deliverable  state. — "  Where 
by  the  agreement,  the  vendor  is  to  do  anything  to  the  goods 


44  SUMMARY  OF  SALES. 

for  the  purpose  of  putting  them  into  that  state  in  which  the 
purchaser  is  to  be  bound  to  accept  them,  or,  as  it  is  some- 
times worded,  into  a  deliverable  state,  the  performance  of 
those  things  shall,  in  the  absence  of  circumstances  indicat- 
ing a  contrary  intention,  be  taken  to  be  a  condition  precedent 
to  th6  vesting  of  the  property."  (Blackburn  on  Contract  of 
Sale  [2ded.],  174.) 

This  rule  "  seems  to  be  founded  in  reason.  In  general,  it 
is  for  the  benefit  of  the  vendor  that  the  property  should  pass ; 
the  risk  of  loss  is  thereby  transferred  to  the  purchaser,  and 
as  the  vendor  may  still  retain  possession  of  the  goods,  so  as 
to  retain  a  security  for  payment  of  the  price,  the  transference 
of  the  property  is  to  the  vendor  pure  gain.  It  is,  therefore, 
reasonable,  that  where  by  the  agreement  the  vendor  is  to  do 
something  before  he  can  call  upon  the  purchaser  to  accept 
the  goods  as  corresponding  to  the  agreement,  the  intention 
of  the  parties  should  be  taken  to  be,  that  the  vendor  was  to 
do  this  before  he  obtained  the  benefit  of  the  transfer  of  the 
property.  The  presumption  does  not  arise,  if  the  things  might 
be  done  after  the  vendor  had  put  the  goods  in  the  state  in 
which  he  had  a  right  to  call  upon  the  purchaser  to  accept 
them,  and  would  be  unreasonable  where  the  acts  were  to  be 
done  by  the  buyer,  who  would  thus  be  rewarded  for  his  own 
default."  (Blackburn  on  Contract  of  Sale  [2d  ed.],  175.) 

This  rule  was  the  law  in  England  until  the  adoption  of  the 
Sale  of  Goods  Act,  when  there  was  added  to  the  rule  the 
provision,  "and  the  buyer  has  notice  thereof"  (sect.  18,, 
rule  2),  on  the  ground  "that  it  was  unfair  that  the  risk 
should  be  transferred  to  the  buyer  without  notice." 
(Chalmers,  Sale  of  Goods  Act  [7th  ed.],  60.)  Without  any 
such  modification,  however,  the  rule  is  well  settled  in  this 
country,  and  is  the  same  in  the  Uniform  Sales  Act.  (Sect. 
19,  rule  2.)  Thus,  where  trees  were  to  be  trimmed  (Acra- 
man  v.  Morrice,  8  C.  B.  449),  cotton  to  be  ginned  and  baled 
(Elgee  Cotton  Cases,  22  Wall.  180),  fish  to  be  dried  (Foster 
v.  Ropes,  111  Mass.  10),  grain  to  be  threshed  (Thompson  v. 


THE  TBANSFEB  OF  TITLE.  45 

Conover,  32  N.  J.  Law,  466),  a  cutter  to  be  finished  and 
delivered  (Halterline  v.  Rice,  62  Barb.  593),  hops  to  be 
baled  (Keeler  v.  Vandervere,  5  Lansing,  313),  or  animals 
to  be  fattened  (Restad  v.  Engemoen,  65  Minn.  148),  the 
doing  of  the  thing  by  the  seller  was  presumptively  a  con- 
dition precedent  to  the  transfer  of  the  property  or  title. 

It  likewise  follows  under  this  rule  that  if  goods  are  to  be 
delivered  at  a  certain  place,  title  will  not  pass  until  delivery 
at  that  place  (Suit  v.  Woodhall,  113  Mass.  391),  unless  there 
be  other  expression  of  intention  (Lynch  v.  O'Donnell,  127 
Mass.  311),  or  other  circumstance,  such  as  payment  of  the 
price  indicating  a  contrary  intention.  (Terry  v.  Wheeler, 
25  N.  Y.  520.)  Merely  because  the  seller  is  to  do  something 
to  the  goods  after  delivery,  or  after  the  right  of  property  in 
the  unfinished  goods  has  been  acquired  by  the  vendee,  will 
not  defeat  the  transfer  of  title,  in  the  absence  of  contrary 
intention.  (Graves  v.  Hepke,  2  B.  &  A.  131;  Mt.  Hope 
Iron  Co.  v.  Buffington,  103  Mass.  62;  Hurd  v.  Cook,  75 
N.  Y.  454;  Kitson  Machine  Co.  v.  Holden,  74  Vt  104.) 

Rule  3  Price  to  be  ascertained  by  weighing,  measuring, 
or  testing. — "  Where  anything  remains  to  be  done  to  the 
goods  for  the  purpose  of  ascertaining  the  price  as  by  weigh- 
ing, measuring,  or  testing  the  goods  where  the  price  is  to 
depend  on  the  quantity  or  quality  of  the  goods ;  the  perform- 
ance of  those  things,  also,  shall  be  a  condition  precedent 
to  the  transfer  of  the  property,  although  the  individual  goods 
be  ascertained,  and  they  are  in  the  state  in  which  they  ought 
to  be  accepted."  (Blackburn  on  Contract  of  Sale  [2d  ed.], 
174.) 

This  rule  "  seems  to  be  somewhat  hastily  adopted  from  the 
civil  law,  without  adverting  to  the  great  distinction  made  by 
the  civilians  between  a  sale  for  a  certain  price  in  money,  and 
an  exchange  for  anything  else.  The  English  law  makes  no 
such  distinction,  but,  as  it  seems,  has  adopted  the  rule  of 
civil  law,  which  seems  to  have  no  foundation  except  in  that 


46  SUMMAEY    OF    SALES. 

distinction.  In  general,  the  weighing,  etc.,  must,  from  the 
nature  of  things,  be  intended  to  be  done  before  the  buyer 
takes  possession  of  the  goods,  but  that  is  quite  a  different 
thing  from  intending  it  to  be  done  before  the  vesting  of  the 
property;  and  as  it  must  in  general  be  intended  that  both 
the  parties  shall  concur  in  the  act  of  weighing,  when  the  price 
is  to  depend  upon  the  weight,  there  seems  little  reason  why, 
in  cases  in  which  the  specific  goods  are  agreed  upon,  it  should 
be  supposed  to  be  the  intention  of  the  parties  to  render  the 
delay  of  that  act,  in  which  the  buyer  is  to  concur,  beneficial 
to  him.  Whilst  the  price  remains  unascertained,  the  sale  is 
clearly  not  for  a  certain  sum  of  money,  and  therefore  does 
not  come  within  the  civilian's  definition  of  a  perfect  sale, 
transferring  the  risk  and  gain  of  the  thing  sold;  but  the 
English  law  does  not  require  that  the  consideration  for  a  bar- 
gain and  sale  should  be  in  moneys  numbered,  provided  it  be  of 
value."  (Blackburn  on  Contract  of  Sale  [2d  ed.],  175.) 

It  may  be  noted  that  this  rule  is  stated,  as  it  was  originally 
stated  (Hanson  v.  Meyer,  6  East,  614),  as  an  absolute  rule, 
instead  of  a  rule  of  presumption,  but,  in  1863,  the  case  of 
Turley  v.  Bates,  2  H.  &  C.  200,  intimated  that  the  rule  should 
be  modified  by  confining  it  to  acts  to  be  done  by  the  seller, 
thus  classing  it  with  Rule  2,  and  treating  it  as  a  rule  of  pre- 
sumption, but  making  it  inapplicable  where  the  thing  remain- 
ing to  be  done  was  to  be  done  by  the  buyer. 

The  English  Sale  of  Goods  Act  (sect.  18,  rule  3)  states  the 
rule  as  above  modified,  but  adds  thereto  "  and  the  buyer  has 
notice  thereof."  The  American  Uniform  Sales  Act  (see 
sect.  19)  does  not  adopt  the  rule,  Professor  Williston,  the 
author  of  the  act,  accounting  therefor  (Sales,  §  266)  by 
saying,  that  "  the  rule  was  originally  founded  on  a  mistake, 
has  no  principle  behind  it,  and  has  already  been  abolished 
in  some  States  in  this  country  without  the  aid  of  legislation. 
The  English  rule,  therefore,  was  not  adopted  in  the  American 
Act." 

"  The  rule  of  Hanson  v.  Meyer  has,"  however,  "  been  gen- 
erally adopted  in  this  country,  and  as  no  especial  stress  had 


THE  TRANSFER  OF  TITLE.  47 

been  laid  in  the  early  English  cases,  upon  the  fact  that  the 
weighing  or  measuring  was  to  be  done  by  the  seller,  it  was 
natural  that  some  States  should  have  applied  the  rule  without 
regard  to  the  question  whether  the  weighing  or  measuring  was 
to  be  done  by  the  buyer  or  the  seller.  In  other  States,  how- 
ever, the  modern  English  modification  of  the  rule  has  been 
adopted  and  the  general  presumption  that  the  property  passes 
when  all  terms  of  the  bargain  are  fixed  is  applicable  although 
the  buyer  is  subsequently  to  weigh  or  measure  the  goods  in 
order  to  complete  the  calculation  of  the  price.  In  a  few  States 
the  presumption  of  retention  of  the  property  because  weighing 
or  measuring  remains  to  be  done  seems  practically  done  away 
with.  Where  the  rule  exists  that  the  property  presumably 
does  not  pass  if  something  remains  to  be  done  to  ascertain  the 
price,  the  rule  is  everywhere  merely  one  of  presumption  which 
will  yield  to  evidence  showing  an  intent  to  transfer  the  prop- 
erty immediately."  (Williston  on  Sales,  §  269,  and  cases 
cited.) 

While  the  rule,  as  modified,  makes  weighing,  measuring  or 
testing,  by  the  seller,  for  the  purpose  of  ascertaining  the  price, 
a  condition  precedent  to  the  transfer  of  title,  some  cases  seem- 
ingly confound  it  with  weighing,  measuring  or  testing,  for 
the  purpose  of  ascertaining  the  goods.  If  goods  are  not  speci- 
fied, and  weighing,  measuring  or  testing  is  to  be  done  for  the 
purpose  of  ascertaining  or  identifying  the  goods,  title,  of 
course,  cannot  naturally  be  presumed  to  pass  until  perform- 
ance of  such  condition,  because  until  then  the  goods  are  not 
ascertained.  "  If  the  goods  sold  are  clearly  identified,  then, 
although  it  may  be  necessary  to  number,  weigh  or  measure 
them,  in  order  to  ascertain  what  would  be  the  price  of  the 
whole  at  a  rate  agreed  upon  between  the  parties,  the  title 
will  pass.  .  .  .  The  distinction  in  all  these  cases  does  not 
depend  so  much  upon  what  is  to  be  done,  as  upon  the  object 
which  is  to  be  effected  by  it.  If  that  is  specification,  the 
property  is  not  changed ;  if  it  is  merely  to  ascertain  the  total 
value  at  designated  rates,  the  change  of  title  is  effected." 
(Crofoot  v.  Bennett,  2  N.  Y.  258,  260.)  See,  also,  Groat 


48  SUMMARY  OF  SALES. 

v.  Gile,  51  K  Y.  431;  Burrows  v.  Whitalcer,  71  N.  Y.  291; 
Sanger  v.  Waterbury,  116  N.  Y.  371. 

If  the  sale  transaction  relates  to  a  specific  quantity  of 
goods  in  mass,  such  as  a  certain  number  of  gallons  of  wine, 
oil,  or  a  certain  number  of  bushels  of  grain,  where  one  unit 
is  the  equivalent  of  any  other  unit,  sometimes  called  "  fun- 
gible goods,"  the  English  courts  hold  that  title  cannot  pass 
until  separation  from  the  mass  takes  place,  because  until  then 
the  goods  sold  are  not  ascertained.  That  is  logically  true, 
but,  in  this  country,  while  some  jurisdictions  follow  the 
English  rule  (Warten  v.  Strane,  82  Ala.  311 ;  Morrison  v. 
Woodley,  84  111.  192 ;  Com.  Nat.  Bank  v.  Gillette,  90  Ind. 
268;  Jeraulds  v.  Brown,  64  N.  H.  606),  other  jurisdictions 
hold,  in  accordance  with  the  leading  case  of  Kimberly  v. 
Patchin,  19  !N".  Y.  330,  that  title  may  pass  without  separa- 
tion, if  the  parties  so  intend.  (Chapman  v.  Shepard,  39 
Conn.  413;  Carpenter  v.  Graham,  42  Mich.  191;  MacKellar 
v.  Pillsbury,  48  Minn.  396 ;  Hurff  v.  Hires,  40  N.  J.  Law, 
581.)  The  Uniform  Sales  Act  (§  6  [2])  adopts  the  law  as 
expressed  in  Kimberly  v.  Patchin,  supra.  "Articles  of  this 
nature  [fungible  goods]  are  sold,  not  by  a  description  which 
refers  to  and  distinguishes  the  particular  thing,  but  in  quan- 
tities, which  are  ascertained  by  weight,  measure  or  count; 
the  constituent  parts  which  make  up  the  mass  being  undis- 
tinguishable  from  each  other  by  any  physical  difference  in 
size,  shape,  texture  or  quality.  Of  this  nature  are  wine, 
oil,  wheat  and  the  other  cereal  grains,  and  the  flour  man- 
ufactured from  them.  These  can  be  identified  only  in  masses 
or  quantities,  and  in  that  mode,  therefore,  they  are  viewed 
in  the  contracts  and  dealings  of  men.  In  respect  to  such 
things,  the  rule  [in  order  to  an  executed  sale,  the  thing  sold 
must  be  ascertained]  .  .  .  must  be  applied  according 
to  the  nature  of  the  subject.  In  an  executed  and  perfect 
sale  the  things  sold,  it  is  true,  must  be  ascertained.  But  as 
it  is  not  possible  in  reason  and  philosophy  to  identify  each 
constituent  particle  composing  a  quantity,  so  the  law  does 
not  require  such  an  identification.  Where  the  quantity  and 


THE  TRANSFER  OF  TITLE.  49 

the  general  mass  from  which  it  is  to  be  taken  are  specified, 
the  subject  of  the  contract  is  thus  ascertained,  and  it  becomes 
a  possible  result  for  the  title  to  pass,  if  the  sale  is  complete 
in  all  its  other  circumstances.     An  actual  delivery  indeed^ 
cannot  be  made  unless  the  whole  is  transferred  to  the  posses-  ' 
sion  of  the  purchaser,  or  unless  the  particular  quantity  sold 
is  separated  from  the  residue.     But  actual  delivery  is  not 
indispensable  in  any  case  in  order  to  pass  a  title,  if  the  thing 
to  be  delivered  is  ascertained,  if  the  price  is  paid  or  a  credit 
given,  and  if  nothing  further  remains  to  be  done  in  regard/ 
to  it." 

Delivery,  although  not  always  essential  to  the  transfer  of 
title,  is  the  most  important  fact  indicative  of  intent  to  trans- 
fer the  ownership  (Burrows  v.  Whitaker,  Yl  N".  Y.  291; 
Odell  v.  Railroad,  109  Mass.  50;  Upson  v.  Holmes,  51  Conn. 
500;  Boswell  v.  Green,  25  1ST.  J.  Law,  390),  unless  a  con- 
trary intention  expressly  appears  (Cornell  v.  Clark,  104 
N.  Y.  451;  Ballantyne  v.  Appleton,  82  Me.  570),  and  pay- 
ment of  the  price  is  also  an  important  indication  of  intention 
to  a  present  transfer  of  title  (Terry  v.  Wheeler,  25  N".  Y. 
520),  although  non-payment  of  the  price  is  naturally  of  little 
importance  in  determining  a  contrary  intention. 

Rule  4. — "(*)  When  goods  are  delivered  to  the  buyer  *  on 
sale  or  return/  or  on  other  terms  indicating  an  intention  to 
make  a  present  sale,  but  to  give  the  buyer  an  option  to 
return  the  goods  instead  of  paying  the  price,  the  property 
passes  to  the  buyer  on  delivery,  but  he  may  revest  the  prop- 
erty in  the  seller  by  returning  or  tendering  the  goods  within 
the  time  fixed  in  the  contract,  or,  if  no  time  has  been  fixed, 
within  a  reasonable  time. 

"(2)  When  goods  are  delivered  to  the  buyer  on  approval 
or  on  trial  or  on  satisfaction,  or  other  similar  terms,  the 
property  therein  passes  to  the  buyer — 

"(a)  When  he  signifies  his  approval  or  acceptance  to  the 
seller  or  does  any.  other  act  adopting  the  transaction; 

"(b)  If  he  does  not  signify  his  approval  or  acceptance  to 
4 


50  SUMMARY  OF  SALES. 

the  seller,  but  retains  the  goods  without  giving  notice  of 
rejection,  then  if  a  time  has  been  fixed  for  the  return  of  the 
goods,  on  the  expiration  of  such  time,  and,  if  no  time  has 
been  fixed,  on  the  expiration  of  a  reasonable  time.  What 
is  a  reasonable  time  is  a  question  of  fact."  (Uniform  Sales 
Act,  §  19,  Rule  3.) 

The  provisions  of  Rule  4  have  been  considered  under  the 
topics  "  Sale  or  return "  and  "  Bailment  with  privilege  of 
purchase/'  ante,  pp.  26,  27,  to  which  the  reader  is  now 
referred. 

"  The  American  decisions  accord  with  these  provisions 
(Rule  4  [2,  b]  above)  in  the  main  (Delamater  v.  Cliappell, 
48  Md.  244 ;  Columbia  Rolling  Co.  v.  Beckett  Co.,  55  1ST.  J.  L. 
391;  Forsaith  Machine  Co.  v.  Mengel,  99  Mich  280;  Butler 
v.  School  District,  149  Pa.  St.  351 ;  Gibson  v.  Vail,  53  Vt. 
476),  although  there  is  some  authority  for  the  view  that  the 
retention  of  the  goods  beyond  the  agreed  time  for  their  return, 
without  notice  of  rejection,  does  not  vest  title  in  the  buyer 
of  itself;  that  it  is  evidence  only  of  acceptance  by  the  pur- 
chaser. (Hunt  v.  Wyman,  100  Mass.  198;  Kahn  v.  Kla- 
bunde,  50  Wis.  235.)  .  .  .  The  English  statute,  follow- 
ing the  decisions  of  England  and  Scotland,  makes  no  dis- 
tinction between  a  '  sale  or  return/  and  a  sale  on  approval. 
(Sale  of  Goods  Act,  §  18,  Rule  4.)"  (Burdick  on  Sales  [2d. 
ed.],  57.)  Judge  Chalmers,  however,  seems  to  recognize  the 
possibility  of  the  distinction,  for  he  says :  "  When  goods  are 
sent  on  trial,  or  on  approval,  or  on  sale  or  return,  the  clear 
general  rule  is  that  the  property  remains  in  the  seller  till 
the  buyer  adopts  the  transaction,  but  it  is  quite  competent 
for  the  parties  to  agree  that  the  property  shall  pass  to  the 
buyer  on  delivery,  but  that,  if  he  does  not  approve  the  goods, 
the  property  shall  then  revest  in  the  seller.  To  use  the  lan- 
guage of  continental  lawyers,  the  condition  on  which  the  goods 
are  delivered  may  be  either  suspensive  or  resolutive." 
(Chalmers,  Sale  of  Goods  [7th  ed.],  62.)  In  this  country 
the  distinction  is  quite  generally  recognized,  is  certainly  con- 
venient, and  whether  title  in  either  transaction  passed,  is  to. 


THE  TRANSFEB  OF  TITLE.  51 

be  determined  according  to  the  intention  of  the  parties  from 
all  the  circumstances  of  the  particular  case. 

Rule  5.  "(r)  Where  there  is  a  contract  for  the  sale  of 
unascertained  or  future  goods  by  description,  and  goods  of 
that  description  and  in  a  deliverable  state  are  uncondi- 
tionally appropriated  to  the  contract,  either  by  the  seller 
with  the  assent  of  the  buyer,  or  by  the  buyer  with  the  assent 
of  the  seller,  the  property  in  the  goods  thereupon  passes  to 
the  buyer.  Such  assent  may  be  express  or  implied,  and 
may  be  given  either  before  or  after  the  appropriation  is 
made. 

"(2)  Where,  in  pursuance  of  the  contract,  the  seller 
delivers  the  goods  to  the  buyer  or  to  a  carrier  or  other 
bailee  or  custodier  (whether  named  by  the  buyer  or  not) 
for  the  purpose  of  transmission  to  the  buyer,  and  does  not 
reserve  the  right  of  disposal,  he  is  deemed  to  have  uncon- 
ditionally appropriated  the  goods  to  the  contract."  (Sale  of 
Goods  Act,  §  18,  Eule  5.) 

"  The  word  appropriation  may  be  understood  in  different 
senses.  It  may  mean  a  selection  on  the  part  of  the  vendor, 
where  he  has  the  right  to  choose  the  article  which  he  has  to 
supply  in  performance  of  his  contract;  and  the  contract  will 
show  when  the  word  is  used  in  that  sense.  Or  the  word  may 
mean,  that  both  parties  have  agreed  that  a  certain  article 
shall  be  delivered  in  pursuance  of  the  contract,  and  yet  the 
property  may  not  pass  in  either  case.  For  the  purpose  of 
illustrating  this  position,  suppose  a  carriage  is  ordered  to 
be  built  at  a  coachmaker's,  he  may  make  any  one  he  pleases, 
and,  if  it  agree  with  the  order,  the  party  is  bound  to  accept 
it.  Now  suppose  that,  at  some  period  subsequent  to  the 
order,  a  further  bargain  is  entered  into  between  this  party 
and  the  coachbuilder,  by  which  it  is  agreed  that  a  particular 
carriage  shall  be  delivered.  It  would  depend  upon  circum- 
stances whether  the  property  passes,  or  whether  merely  the 
original  contract  is  altered  from  one  which  would  have  been 
satisfied  by  the  delivery  of  any  carriage  answering  the  terms 


52  SUMMAKY   OF   SALES. 

of  the  contract,  into  another  contract  to  supply  the  particular 
carriage, —  which,  in  the  Roman  law,  was  called  obligatio 
certi  corporis,  where  a  person  is  bound  to  deliver  a  particular 
chattel,  but  where  the  property  does  not  pass,  as  it  never  did 
by  the  Roman  law,  until  actual  delivery;  although  the  prop- 
erty, after  the  contract,  remained  at  the  risk  of  the  vendee, 
and  if  lost  without  any  fault  in  the  vendor,  the  vendee,  and 
not  the  vendor,  was  the  sufferer.  The  law  of  England  is 
different:  here,  property  does  not  pass  until  there  is  a  bar- 
gain with  respect  to  a  specific  article,  and  everything  is  done 
which,  according  to  the  intention  of  the  parties  to  the  bar- 
gain, was  necessary  to  transfer  the  property  in  it.  'Appro- 
priation' may  also  be  used  in  another  sense,  .  .  .,  viz., 
where  both  parties  agree  upon  the  specific  article  in  which 
the  property  is  to  pass,  and  nothing  remains  to  be  done  in 
order  to  pass  it."  (Parke,  B.,  in  Wait  v.  Baker,  2  Exch. 
Rep.  1.) 

"  In  all  completed  contracts  of  sale,  property  in  the  goods 
sold  passes  to  the  buyer,  although  they  may  not  have  come 
to  his  actual  possession.  An  unconditional  sale  of  specific 
chattels  passes  the  title  at  once,  and  the  buyer  takes  the  risk 
of  loss,  and  has  the  right  to  immediate  possession.  When 
anything  remains  to  be  done,  in  the  way  of  specifically  appro- 
priating the  goods  sold  to  the  contract,  the  agreement  is 
executory  and  the  property  does  not  pass.  When,  from  the 
nature  of  the  agreement,  the  vendor  is  to  make  the  appro- 
priation, then,  as  soon  as  any  act  is  done  by  him,  identifying 
the  property,  and  it  is  set  apart  with  the  intention  uncon- 
ditionally to  apply  it  in  fulfilment  of  the  contract,  the  title 
vests,  and  the  sale  is  complete.  Thus  the  delivery  to  the 
buyer  or  his  agent,  or  to  a  common  carrier,  consigned  to  him, 
whether  a  bill  of  lading  is  taken  or  not,  if  there  is  nothing 
in  the  circumstances  to  control  the  effect  of  the  transaction, 
will  be  sufficient.  If  the  bill  of  lading,  or  other  written  evi- 
dence of  the  delivery  to  the  carrier,  be  taken  in  the  name  of 
the  consignee,  or  be  transferred  to  him  by  indorsement,  the 
strongest  proof  is  afforded  of  the  intention  to  transfer  an 


53 

absolute  title  to  the  vendee.  But  the  vendor  may  retain  his 
hold  upon  the  goods  to  secure  payment  of  the  price,  although 
he  puts  them  in  course  of  transportation  to  the  place  of  des- 
tination, by  delivery  to  a  carrier.  The  appropriation  which 
he  then  makes  is  said  to  be  provisional  or  conditional.  He 
may  take  the  bill  of  lading  or  carrier's  receipt,  in  his  own  or 
some  agent's  name,  to  be  transferred  on  payment  of  the  price, 
by  his  own  or  his  agent's  indorsement  to  the  purchaser,  and 
in  all  cases  when  he  manifests  an  intention  to  retain  this 
jus  disponendi,  the  property  will  not  pass  to  the  vendee. 
Practically  the  difficulty  is  to  ascertain,  when  the  evidence 
is  meagre  or  equivocal,  what  the  real  intention  of  the  parties 
was  at  the  time.  It  is  properly  a  question  of  fact  for  the 
jury,  under  proper  instructions,  and  must  be  submitted  to 
them,  unless  it  is  plain  as  matter  of  law  that  the  evidence 
will  justify  a  finding  but  one  way."  (Merchants'  Nat.  Bank 
v.  Bangs,  102  Mass.  291,  295.)  See,  also,  Aldridge  v.  John- 
son, 7  El.  &  Bl.  885 ;  Langton  v.  Higgins,  4  H.  &  N.  402. 

In  Andrews  v.  Cheney,  62  N.  H.  404,  the  plaintiff  bought 
goods  of  the  defendant,  and  paid  for  them.  The  defendant 
did  not  have  in  stock  the  goods  wanted,  so  the  plaintiff 
selected  the  kind  and  quality  desired  from  samples.  The 
defendant  agreed  to  have  the  goods  at  his  store  within  two 
weeks,  at  which  time  the  plaintiff  was  to  call  for  them;  if 
they  were  ready  before  that  time,  the  defendant  agreed  to 
notify  him.  Within  the  stipulated  time,  the  defendant  got 
the  goods  into  his  store,  set  them  apart  by  themselves,  and 
marked  them  with  the  plaintiff's  name.  Afterwards,  the 
goods,  together  with  the  store,  were  destroyed  by  fire,  the 
plaintiff  not  having  called  for  them.  The  court,  at  p.  404, 
said :  "  The  agreement  on  the  part  of  the  defendant  was 
executory.  He  agreed  to  furnish  goods  corresponding  to  the 
samples  selected  by  the  plaintiff.  If  the  goods,  subsequently 
procured  and  set  apart  by  the  defendant,  did  not  conform  to 
the  samples,  the  plaintiff  had  a  right  to  reject  them.  It  does 
not  appear  that  he  waived  that  right.  The  defendant  was 
not  concluded  by  his  selection;  he  might  have  sold  or  other- 


54  SUMMAKY    OF    SALES. 

wise  disposed  of  the  particular  articles  set  apart  by  him,  and 
substituted  others  in  their  place.  A  contract  of  sale  is  not 
complete  until  the  specific  goods  upon  which  it  is  to  operate 
are  agreed  upon.  ...  If ,  as  in  the  case  of  a  sale  by  sample, 
the  specific  goods  are  not  ascertained  by  the  agreement,  the 
property  does  not  pass  until  an  appropriation  of  specific 
goods  to  the  contract  is  made  with  the  assent  of  both  parties. 
(Bog  Lead  Mining  Co.  v.  Montague,  10  C.  B.  [N.  S.]  489; 
Jenner  v.  Smith,  L.  R.  4  C.  P.  270;  Hielbutt'v.  Hickson, 
L.  K.  7  C.  P.  438 ;  Merchants  N.  Bank  v.  Bangs,  102  Mass. 
291;  Black.  Sales,  122,  127;  Benj.  Sales,  §  358.)  If  the 
plaintiff  authorized  the  defendant  to  make  the  selection,  the 
property  immediately  on  the  selection  vested  in  the  plain- 
tiff. (Aldridge  v.  Johnson,  7  E.  &  B.  885.)  It  not  appear- 
ing that  the  plaintiff  gave  such  authority,  the  goods  at  the 
time  of  the  fire  were  the  property  of  the  defendant,  and  their 
destruction  was  his  loss." 

"  It  has  been  already  said  that  the  specific  goods  must  be 
agreed  upon ;  that  is,  both  parties  must  be  pledged,  the  one  to 
give  and  the  other  to  accept  those  specific  goods.  This  is 
obviously  just,  for  until  both  parties  are  so  agreed,  the  appro- 
priation cannot  be  binding  upon  either;  not  upon  the  one, 
because  he  has  not  consented,  nor  upon  the  other,  because 
the  first  is  free.  But  the  application  of  this  principle 
leads  to  nice  and  subtle  distinctions,  which  perhaps  cannot 
be  helped,  but  are  not  the  less  to  be  lamented.  When  the 
goods  are  selected  from  the  first  in  the  original  agreement 
there  is  of  course  no  difficulty  on  the  point,  both  parties  are 
then  bound  to  apply  the  contract  to  those  specific  goods. 
Neither  is  there  any  difficulty  where  both  parties  have  subse- 
quently assented  to  the  appropriation  of  some  specific  goods 
to  fulfill  an  agreement  that  in  itself  does  not  ascertain  which 
the  goods  are  to  be.  The  effect  is  then  the  same  as  if  the 
parties  had  from  the  first  agreed  upon  a  sale  of  those  specific 
goods.  In  the  accurate  language  of  Holroyd,  J.  (Rhode  v. 
Thwaites,  6  B.  &  C.  388),  '  the  selection  of  the  goods  by  the 
one  party  and  the  adoption  of  that  act  by  the  other,  converts 


THE  TKANSFEK  OF  TITLE.  55 

that  which  before  was  a  mere  agreement  to  sell  into  an  actual 
sale,  and  the  property  thereby  passes.' 

"  But  the  difficulty  arises  when  the  original  agreement 
does  not  ascertain  the  specific  goods,  and  one  party  has  appro- 
priated some  particular  goods  to  the  agreement,  but  the  other 
party  has  not  subsequently  assented  to  such  an  appropriation. 
Such  an  appropriation  is  revocable  by  the  party  who  made  it 
and  not  binding  on  the  other  party,  unless  it  was  made  in 
pursuance  of  an  authority  to  make  the  election  conferred  by 
agreement;  or  unless  the  act  is  subsequently  and  before  its 
revocation  adopted  by  the  other  party.  In  either  case  it 
becomes  final  and  irrevocably  binding  on  both  parties. 

"  The  question  of  whether  there  has  been  a  subsequent 
assent  or  not,  is  one  of  fact ;  the  other  question  of  whether  the 
selection  by  one  party  merely  showed  an  intention  in  that 
party  to  appropriate  those  goods  to  the  contract,  or  showed  a 
determination  of  a  right  of  election,  is  one  of  law,  and  some- 
times of  some  nicety."  (Blackburn  on  Contract  of  Sale 
[2d.  ed.],  128.) 

"  The  question  as  to  what  acts  are  necessary  to  be  per- 
formed by  a  vendor  under  an  executory  agreement  for  the 
sale  of  unspecified  goods  in  order  to  transfer  the  title  to  the 
vendee  and  subject  him  to  the  risk  of  the  carriage,  depends 
entirely  upon  the  agreement,  either  express  or  implied,  be- 
tween the  parties.  If  the  vendor  undertakes  to  make  the 
delivery  himself  at  a  distant  place,  thus  assuming  the  risk  in 
the  carriage,  the  carrier  becomes  the  agent  of  the  vendor,  and 
the  property  will  not  pass  until  the  delivery  is  actually  made. 
On  the  other  hand,  if  the  goods  are  delivered  to  a  carrier 
specially  designated  by  the  purchaser,  he  becomes  the  agent 
of  the  latter,  and  the  title  to  the  property,  as  a  general  rule, 
will  pass  the  moment  the  goods  are  dispatched.  Should  the 
contract  of  purchase  be  silent  as  to  the  person  or  mode  by 
which  the  goods  are  to  be  sent,  a  delivery  by  the  vendor  to 
a  common  carrier  in  the  usual  and  ordinary  course  of  busi- 
ness transfers  the  property  to  the  vendee."  (Magruder  v. 
Gage,  33  Md.  344,  348.) 


56  SUMMAKY    OF    SALES. 

"  When  goods  ordered  and  contracted  for  are  not  directly 
delivered  to  the  purchaser,  but  are  to  be  sent  to  him  by  the 
vendor,  and  the  vendor  delivers  them  to  the  carrier,  to  be 
transported  in  the  mode  agreed  on  by  the  parties  or  directed 
by  the  purchaser,  or,  when  no  agreement  is  made  or  direction 
given,  to  be  transported  in  the  usual  mode;  or  when  the 
purchaser,  being  informed  of  the  mode  of  transportation, 
assents  to  it ;  or  when  there  have  been  previous  sales  of  other 
goods,  to  the  transportation  o±  which  in  a  similar  manner 
the  purchaser  has  not  objected, —  the  goods,  when  delivered 
to  the  carrier,  are  at  the  risk  of  the  purchaser,  and  the  prop- 
erty is  deemed  to  be  vested  in  him,  subject  to  the  vendor's 
right  of  stoppage  in  transitu."  (Wheelhouse  v.  Parr,  141 
Mass.  593,  595.  "A  delivery  to  a  carrier,  pursuant  to  the 
direction  of  the  purchaser,  is  a  good  delivery  to  him.  Though 
not  sufficient  to  constitute  an  acceptance  under  the  statute  of 
frauds  (61  N.  Y.  1),  it  is  sufficient  to  constitute  a  delivery." 
(Wilcox  Silver  Plate  Co.  v.  Green,  72  N".  Y.  17,  20.) 

C.  O.  D.  shipment. — The  authorities  are  in  conflict  as 
to  the  passing  of  title,  when  goods  are  shipped  C.  O.  D. 
While  the  case  of  Higgins  v.  Murray,  73  N.  Y.  352,  is  some- 
times referred  to  in  support  of  the  rule  that  title  passes  on 
delivery  of  a  C.  O.  D.  package  to  a  carrier,  that  case  did  not 
depend  on  where  the  title  was,  as  in  the  case  of  a  sale  of 
goods,  and  did  not  so  decide.  The  following  jurisdictions 
hold  that  in  such  case  title  passes:  State  v.  Intoxicating 
Liquors,  73  Me.  278;  State  v.  Peters,  91  Me.  31;  Com.  v. 
Fleming,  130  Pa.  St.  138 ;  Norfolk  R.  Co.  v.  Barnes,  104 
N".  C.  25;  Pilgreen  v.  State,  71  Ala.  368;  Breechwald  v. 
People,  21  111.  App.  213;  State  v  Carl,  43  Ark.  353.  The 
following  hold  that  title  does  not  pass:  State  v.  O'Neil,  58 
Vt.  140 ;  U.  S.  v.  Shriver,  23  Fed.  Kep.  134 ;  State  v.  Wing- 
field,  115  Mo.  428;  Lane  v.  Chadwick,  146  Mass.  68;  Baker 
v.  Bourcicault,  1  Daly.  23.  Professor  Williston  (Sales, 
§  279)  prefers  the  former  "on  principle  as  well  as  because 
of  the  weight  of  authority,''  but  the  reasons  advanced  there- 


THE  TRANSFER  OF  TITLE.  57 

for  are  not  very  convincing.  However,  the  view  that  title 
passes  is  adopted  by  the  Uniform  Sales  Act  (section  19, 
rule  4  [2]). 

Quantity  shipped  must  conform  to  order. — Where  goods 
are  ordered  to  be  shipped  by  a  carrier,  the  quantity  delivered 
by  the  seller  to  the  carrier  must  conform  to  the  request  in 
order  to  pass  title  to  the  buyer.  In  Barton  v.  Kane,  17  Wis. 
37,  43,  "  the  cigars  forwarded  exceeded  the  quantity  ordered. 
The  order  was  for  5,000,  but  the  plaintiff  sent  5,625.  This 
was  no  compliance  with  the  order,  and  imposed  no  obligation 
on  the  defendant,  without  showing  an  acceptance  in  fact  by 
him  after  the  cigars  were  received,  the  burden  of  which  was 
upon  the  plaintiff.  To  constitute  a  delivery  to  the  carrier  a 
delivery  to  the  consignee,  so  as  to  pass  the  title  and  make  the 
consignee  liable  for  goods  sold  and  delivered,  the  goods  must 
correspond,  in  quantity  as  well  as  quality,  with  those  named 
in  the  order.  Bruce  v.  Pearson,  3  Johns.  534,  and  Downer 
v.  Thompson,  2  Hill,  137,  are  clear  upon  this  question;  and 
though  the  latter  was  reversed  in  the  court  of  errors  (6  Hill, 
208),  the  main  point  of  reversal  cannot  arise  here.  There 
can  be  no  pretense  that  the  625  extra  cigars  were  sent  out  of 
an  abundance  of  caution,  and  to  insure  a  scriptural  com- 
pliance with  the  order.  They  were  sent  to  fill  up  the  case, 
and  the  defendant  was  charged  with  their  price.  To  entitle 
him  to  recover  under  the  circumstances,  the  plaintiff  should 
have  shown  that  the  defendant  actually  received  and  accepted 
the  cigars  sent,  upon  the  terms  indicated  in  the  plaintiff's 
letter  notifying  him  of  the  consignment."  See,  also,  Dixon 
v.  Fletcher,  3  M.  &  W.  145 ;  Hart  v.  Mills,  15  M.  &  W.  85 ; 
Norrington  v.  Wright,  115  TJ.  S.  188;  Croninger  v.  Crocker, 
62  K  Y.  151;  Rommel  v.  Wingate,  103  Mass.  327;  Downes 
v.  Marsh,  29  Conn.  409 ;  Ellis  v.  Roche,  73  111.  280 ;  Willis- 
ton  on  Sales,  §§  459-461 ;  Benjamin  on  Sales  (5th  Eng.  ed.), 
695;  Burdick  on  Sales  (2d  ed.),  114;  Uniform  Sales  Act, 
§  44. 


58  StJMMABY    OF    SALES. 

Order  calling  for  "more  or  less." — Sometimes  the  con- 
tract states  the  quantity  with  qualifying  words,  such  as 
"  about"  "  more  or  less"  or  words  of  like  import.  In  such 
case  the  Supreme  Court  of  the  United  States  has  formulated 
the  following  as  the  result  of  an  examination  of  the  author- 
ities :  "  Where  a  contract  is  made  to  sell  or  furnish  certain 
goods  identified  by  reference  to  independent  circumstances, 
such  as  an  entire  lot  deposited  in  a  certain  warehouse,  or  all 
that  may  be  manufactured  by  the  vendor  in  a  certain  estab- 
lishment, or  that  may  be  shipped  by  his  agent  or  correspond- 
ent in  certain  vessels,  and  the  quantity  is  named  with  the 
qualification  of  '  about,'  or  '  more  or  less/  or  words  of  like 
import,  the  contract  applies  to  the  specific  lot;  and  the  nam- 
ing of  the  quantity  is  not  regarded  as  in  the  nature  of  a 
warranty,  but  only  as  an  estimate  of  the  probable  amount,  in 
reference  to  which  good  faith  is  all  that  is  required  of  the 
party  making  it.  In  such  cases,  the  governing  rule  is  some- 
what analogous  to  that  which  is  applied  in  the  description 
of  lands,  where  natural  boundaries  and  monuments  control 
courses  and  distances  and  estimates  of  quantity. 

"  But  when  no  such  independent  circumstances  are  re- 
ferred to,  and  the  engagement  is  to  furnish  goods  of  a  cer- 
tain quality  or  character  to  a  certain  amount,  the  quantity 
specified  is  material,  and  governs  the  contract.  The  addition 
of  the  qualifying  words,  '  about/  '  more  or  less,'  and  the  like, 
in  such  cases,  is  only  for  the  purpose  of  providing  against 
accidental  variations  arising  from  slight  and  unimportant 
excesses  or  deficiencies  in  number,  measure,  or  weight. 

"  If,  however,  the  qualifying  words  are  supplemented  by 
other  stipulations  or  conditions  which  give  them  a  broader 
scope  or  a  more  extensive  significancy,  then  the  contract  is  to 
be  governed  by  such  added  stipulations  or  conditions.  As, 
if  it  be  agreed  to  furnish  so  many  bushels  of  wheat,  more  or 
less,  according  to  what  the  party  receiving  it  shall  require 
for  the  use  of  his  mill,  then  the  contract  is  not  governed  by 
the  quantity  named,  nor  by  that  quantity  with  slight  and 
unimportant  variations,  but  by  what  the  receiving  party  shall 


THE  TRANSFEB  OF  TITLE.  59 

require  for  the  use  of  his  mill;  and  the  variation  from  the 
quantity  named  will  depend  upon  his  discretion  and  require- 
ments, so  long  as  he  acts  in  good  faith."  (Brawley  v.  U.  S.f 
96  U.  S.  168,  171.) 

Reservation  of  right  of  disposal. —  In  case  of  an  agree- 
ment to  sell  specific  goods,  the  seller  may,  notwithstanding 
delivery  of  the  goods,  retain  title  therein  until  performance 
of  some  annexed  condition,  such  as  payment  of  the  price,  and 
such  reservation  of  title  is  effective  between  the  parties,  and, 
in  the  absence  of  statute,  even  as  to  third  persons.  "  It  has 
long  been  the  settled  rule  of  law  in  this  commonwealth,  that 
a  sale  and  delivery  of  goods,  on  condition  that  the  property  is 
not  to  vest  until  the  purchase-money  is  paid  or  secured,  does 
not  pass  the  title  to  the  vendee,  and  that  the  vendor,  in  case 
the  condition  is  not  fulfilled,  has  a  right  to  repossess  himself 
of  the  goods,  both  against  the  vendee,  and  against  his  cred- 
itors, claiming  to  hold  them  under  attachments."  (Coggill 
v.  Hartford  &  N.  H.  R.  E.  Co.,  3  Gray,  545,  546.)  See, 
also,  Smith  v.  Lynes,  5  N.  Y.  41 ;  Cole  v.  Mann,  62  N.  Y. 
1;  Harkness  v.  Russell,  118  U.  S.  663.  Such  a  transaction 
is,  properly  speaking,  a  contract  to  sell  upon  condition,  and 
not  a  conditional  sale  as  it  is  customarily,  but  improperly, 
designated.  (See  "Absolute  and  conditional  sales,"  ante,  p. 
4,  and  "Lease,"  ante,  p.  28.)  The  rights  of  third  persons 
thereunder  will  be  considered  later  under  "  bona  fide  pur- 
chasers from  conditional  vendee." 

Reservation  of  title  by  bill  of  lading. — A  common  way  of 
reserving  title  is  by  means  of  a  bill  of  lading.  "  We  have 
uniformly  held,"  says  the  New  York  Court  of  Appeals,  "  that 
the  bill  of  lading  is  the  evidence^pf  title,  and^s_jufficient_to 
vest  the  ownership  and  absolute  control  in  him  to  whose 
order  it  Js  drawn  "  (Moors  v.  Kidder,  106  N.  Y.  32,  41), 
ancTthisaccords  with  the  law  as  expressed  in  Evans  v.  Mar- 
lett,  1  Ld.  Raym.  271.  "  If  the  bill  of  lading  shows  that  the 
consignment  was  made  for  the  benefit  of  the  consignor  or  his 


60  SUMMARY  OF  SALES. 

order,  it  is  very  strong  proof  of  his  intention  to  reserve  the 
jus  disponendi.  And  on  the  other  hand,  if  the  bill  of  lading 
shows  that  the  shipment  is  made  for  the  benefit  of  the  con- 
signee, it  is  almost  decisive  of  the  consignor's  intention  to 
part  with  the  ownership  of  the  property."  (Emery's  Sons  v. 
Irving  Nat.  Bank,  25  Ohio  St.  360,  365.)  Or,  as  stated  in 
Wigton  v.  Bowley,  130  Mass.  252,  254,  "  If  the  bill  of  lading 
or  written  evidence  of  the  delivery  to  a  carrier  be  taken  in 
the  name  of  the  consignee,  or  be  transferred  to  him  by  in- 
dorsement, the  strongest  proof  is  afforded  of  the  intention 
to  transfer  the  property  to  the  vendee.  (Merchants'  Na- 
tional Bank  v.  Bangs,  102  Mass.  291.)  If  the  vendor 
intends  to  retain  the  right  to  dispose  of  the  goods  while  they 
are  in  course  of  transportation,  he  must  manifest  that  in- 
tention at  the  time  of  their  delivery  to  the  carrier.  It  is  not 
the  secret  purpose,  but  the  intention  as  disclosed  by  the 
vendor's  acts  and  declarations  at  the  time,  which  governs." 
"  It  will  be  observed,"  says  Professor  Williston  (Sales, 
§  282),  "that  this  use  of  bills  of  lading  as  a  controlling 
indication  of  the  ownership  of  the  goods  seriously  qualifies 
the  principles  already  laid  down  in  regard  to  appropriation 
of  goods  by  the  seller  when  he  delivers  them  to  a  carrier." 

"  Where  goods  are  shipped,  and  ~by  the  bill  of  lading  the 
goods  are  deliverable  to  the  order  of  the  seller  or  his  agentf 
the  seller  is  prima  facie  deemed  to  reserve  the  right  of  dis- 
posal" (Sale  of  Goods  Act,  §  19  [2].)  See,  also,  Mirabita 
v.  Bank,  3  Ex.  D.  164,  172 ;  Dows  v.  Nat.  Bank,  91  U.  S. 
618,  631;  Farmers'  Bank  v.  Logan,  74  N.  Y.  568,  578; 
Merchants'  Nat.  Bank  v.  Bangs,  102  Mass.  291,  295. 

"  This  inference  of  intention  may  be  rebutted  by  other 
evidence.  Accordingly,  if  the  seller  indorses  such  a  bill  of 
lading  and  sends  it  to  the  purchaser ;  or  if  he  takes  the  bill  of 
lading  in  this  form  for  some  collateral  purpose,  such  as  pro- 
tecting himself  in  case  the  purchaser  does  not  accept  the 
goods;  or  if  the  original  contract  shows  that  the  vendor  is 
not  to  retain  the  right  of  disposal;  or  if  the  invoice  con- 
tradicts the  bill  of  lading,  as  by  declaring  that  the  vendor 


THE  TEANSFEK  OF  TITLE.  61 

shipped  the  goods  by  the  order  and  for  account  and  risk  of 
the  purchaser, —  title  may  pass  to  the  purchaser  notwith- 
standing the  form  of  the  bill  of  lading.  The  controlling 
element,  in  all  cases  of  the^ind  now  under  Consideration, 
isTthe  jntention  of  the  consignor  as  shown  by  his  acts_at_ 
the  time  of  shipping  the*  goods.  When  such  acts  are  equivocal 
the  consignor's  intention  is  a  question  of  fact  for  the  jury." 
(Burdick  on  Sales  [2d  ed.],  66,  and  cases  cited.) 

"  Where  the  seller  of  goods  draws  on  the  buyer  for  the 
price,  and  transmits  the  bill  of  exchange  and  bill  of  lading 
to  the  buyer  together  to  secure  acceptance  or  payment  of  the 
bill  of  exchange,  the  buyer  is  bound  to  return  the  bill  of 
lading  if  he  does  not  honour  the  bill  of  exchange,  and  if  he 
wrongfully  retains  the  bill  of  lading  the  property  in  the  goods 
does  not  pass  to  him/'  (Sale  of  Goods  Act,  §  19  [3].) 
See,  also,  Mirabita  v.  Bank,  3  Ex.  D.  164,  173;  Farmers' 
Bank  v.  Logan,  74  !NT.  Y.  568,  578 ;  Alderman  v.  Railroad, 
115  Mass.  233 ;  Jones  v.  Brewer,  79  Ala.  545 ;  Freeman  v. 
Kraemer,  63  Minn.  242 ;  McArthur  Co.  v.  Bank,  122  Mich. 
223.  "  But,"  said  Cotton,  L.  J.,  in  Mirabita  v.  Bank,  supra, 
"  if  the  bill  of  lading  has  been  dealt  with  only  to  secure  the 
contract  price,  there  is  neither  principle  nor  authority  for 
holding  that  in  such  a  case  the  goods  shipped  for  the  purpose 
of  completing  the  contract  do  not,  on  payment  or  tender 
by  the  purchaser  of  the  contract  price,  vest  in  him.  When 
this  occurs  there  is  a  performance  of  the  condition  subject  to 
which  the  appropriation  was  made,  and  everything  which, 
according  to  the  intention  of  the  parties,  is  necessary  to 
transfer  the  property  is  done;  and  in  my  opinion,  under 
such  circumstances,  the  property  does,  on  payment  or  tender 
of  the  price,  pass  to  the  purchaser." 

"  Most  frequently,  when  the  seller  wishes  to  secure  the 
price,  he  draws  on  the  buyer  for  the  amount  and  obtains  a 
discount  of  the  bill  of  exchange  from  a  banker,  to  whom  he 
delivers  it  with  the  indorsed  bill  of  lading  attached.  Under 
these  circumstances  the  banker  acquires  a  special  property 
in  the  goods  to  secure  his  advances,  and  the  property  does 


62  SUMMARY  OF  SALES. 

not  pass  to  the  buyer  until  acceptance  or  payment  of  the  bill 
or  tender  of  the  price.  The  same  rule  is  applied  when  the 
seller  takes  a  bill  of  lading  making  the  goods  deliverable  to 
the  buyer  and  thus  deals  with  it  to  secure  the  price.  Under 
these  circumstances  the  banker  acquires  a  special  property 
in  the  goods  to  secure  his  advances."  (Tiffany  on  Sales  [2d 
ed.],  171,  and  cases  cited.) 

The  reader  is  also  referred  to  section  20  of  the  Uniform 
Sales  Act. 

B.  As  to  third  persons. 

"  Nemo  dat  quod  non  habet." —  In  order  to  be  able  to 
pass  title  to  goods,  the  seller  must  be  owner,  or  he  must  have 
authority  from  the  owner  or  be  authorized  by  law  to  pass 
title,  or  the  owner  must  by  conduct  be  precluded  from  deny- 
ing the  authority,  because  no  one  can  give  what  he  has  not. 
"  The  universal  and  fundamental  principle  of  our  law  of 
personal  property,  is,  that  no  man  can  be  divested  of  his 
property  without  his  own  consent;  and,  consequently,  that 
even  the  honest  purchaser  under  a  defective  title  cannot  hold 
against  the  true  proprietor.  That  '  no  one  can  transfer  to 
another  a  better  title  than  he  has  himself,'  is  a  maxim,  says 
Chancellor  Kent,  l  alike  of  the  common  and  the  civil  law, 
and  a  sale,  ex  m  termini,  imports  nothing  more  than  that 
the  feona  fide  purchaser  succeeds  to  the  rights  of  the  vendor." 
(Saltus  v.  Everett,  20  Wend.  267,  275.)  See,  also,  the 
Uniform  Sales  Act,  §  23  (1). 

Exceptions :  Sales  in  markets  overt. — An  exception  to  the 
above  rule  in  English  law  was  that  of  sales  in  market  overt. 
"  It  is  known  to  the  professional  members  of  the  court,  that 
in  the  market  towns  of  England  there  are  periodical  fairs, 
where  property  is  bought  and  sold,  called  market  days;  and 
that  by  the  custom  of  the  city  of  London,  every  day  except 
Sunday,  is  a  market  day,  and  every  tradesman's  shop  is  a 
market  overt  for  those  things  in  which  he  usually  deals  at 


THE  TRANSFER  OF  TITLE.  63 

that  place;  and  that  by  the  common  law,  a  sale  in  a  mar- 
ket overt  actually  changes  the  title  to  the  property  in  favor 
of  a  bond  fide  purchaser  thereof,  even  though  it  has  been 
stolen  from  the  rightful  owner.  (5  Coke's  R.  83,  a.)  The 
only  remedy  of  the  owner  of  stolen  property  to  recover 
it  again,  under  such  circumstances,  at  the  common  law,  was 
to  pursue  his  appeal  against  the  felon  to  conviction,  and 
then  he  was  entitled  to  restitution  of  his  goods,  although 
they  had  been  sold  in  a  market  overt.  (Coke's  2d  Inst.  714.) 
So,  also,  if  goods  were  stolen,  and  the  thief  abandoned  or 
waived  them  in  his  flight,  they  were  forfeited  to  the  crown, 
or  the  lord  of  the  manor,  unless  the  owner  proceeded  upon 
his  appeal  to  attaint  the  thief.  (Foxley's  Case,  5  Coke, 
109,  a.)  But  as  this  proceeding  to  convict  the  felon  by  a 
private  suit  was  very  inconvenient  and  expensive  to  the 
owner  of  stolen  property,  the  statute  21  Hen.  VIII.,  ch.  11, 
was  enacted,  by  which  the  stolen  goods  were  directed  to  be 
restored  to  the  owner  upon  his  procuring  a  conviction  of 
the  thief,  upon  an  indictment  in  the  ordinary  way,  without 
the  necessity  of  an  appeal.  (Staunf.  P.  C.  ed.,  of  1853, 
p.  167.)  Under  this  statute,  it  is  the  settled  law  in  England, 
that  upon  the  conviction  of  the  offender,  the  owner  is  en- 
titled to  be  restored  to  his  property,  notwithstanding  it  may 
have  been  sold  to  a  bona  fide  purchaser  in  a  market  overt. 
(Burgess  v.  Koney,  Trem.  P.  C.  315;  Coke's  2d  Inst.  714; 
J.  Kelyng's  R.  48.)"  Hoffman  v.  Carow,  22  Wend.  285, 
290. 

As  to  the  source  of  this  exception  in  the  English  law, 
reference  may  be  had  to  Peer  v.  Humphrey,  2  Ad.  &  El. 
495;  Crane  v.  London  Dock  Co.,  3  B.  &  S.  313;  Bryant 
v.  Whitcher,  52  N.  H.  158.  For  the  present  law  of  England 
thereon,  see  Sale  of  Goods  Act,  §§  22,  24. 

The  custom  of  sales  in  market  overt  has  never  been  rec- 
ognized in  this  country.  (Wheelwright  v.  Depeyster,  1 
Johns.  471;  Dame  v.  Baldwin,  8  Mass.  518;  Ventress  v. 
Smith,  10  Pet.  161;  2  Kent's  Com.  324.) 


64  SUMMAEY    OF    SALES. 

Negotiable  paper.— The  transfer  of  title  to  negotiable 
paper  is  often  stated  to  be  also  an  exception  to  the  general 
law  that  a  man  cannot  be  divested  of  his  property  without 
his  consent.  "  The  first  and  most  remarkable  class  of  these 
exceptions  relates  to  money,  cash,  bank  bills,  checks,  and 
notes  payable  to  the  bearer  or  transferable  by  delivery,  and 
in  short,  whatever  comes  under  the  general  notion  of  cur- 
rency. It  was  decided  by  Lord  Chief  Justice  Holt,  at  an 
early  period  of  our  commercial  law,  that  money  and  bills 
payable  to  bearer,  though  stolen,  could  not  be  recovered 
after  they  had  passed  into  currency ;  and  this  '  by  reason  of 
the  course  of  trade  which  creates  a  property  in  the  holder.' 
'  They  pass  by  delivery  only,  and  are  considered  as  cash, 
and  the  possession  always  carries  with  it  the  property/ 
(1  Salk.  126.)"  (Saltus  v.  Everett,  20  Wend.  267,  277.) 

The  transfer  of  title  to  negotiable  paper,  however,  stands 
upon  a  different  footing  from  the  transfer  of  title  to  goods. 
"An  examination  of  the  cases  will  show  that  this  part  of 
the  law  of  negotiable  paper  rests  on  grounds  quite  peculiar 
to  itself,  for  the  following  reasons:  1.  The  protection  of 
the  bona  fide  holder  of  paper,  transferable  by  delivery,  ex- 
tends even  to  cases  where  the  paper  has  been  lost  or  stolen. 
But  it  has  been  often  decided  that  loss  by  accident,  theft, 
or  robbery,  does  not  divest  the  title  of  the  owner  of  goods, 
nor  give  a  title  in  them  to  a  fair  after  purchaser.  2.  The 
rule  is  put  by  all  the  authorities  on  the  express  and  separate 
ground  of  the  necessity  of  sustaining  the  credit  and  circu- 
lation of  the  currency.  Thus  Lord  Chief  Justice  Hard- 
wicke :  '  No  dispute  ought  to  be  made  with  the  holder  of 
a  cash  note,  who  came  fairly  by  it,  for  the  sake  of  currency, 
to  which  discrediting  such  notes  would  be  a  great  disturb- 
ance.' See,  too,  the  reasoning  of  Lord  Mansfield,  in  all 
cases  on  this  head  decided  before  him.  Thus,  says  he,  in 
the  case  of  a  stolen  note,  Peacock  v.  Rhodes,  1  Doug.  636, 
'An  assignee  must  take  the  thing  assigned,  subject  to  all 
the  equity  to  which  the  original  party  was  subject.  If  this 


THE  TRANSFER  OF  TITLE.  65 

rule  was  applied  to  bills,  it  would  stop  their  currency.' 
Similar  reasons  are  assigned  for  the  same  decision  by 
American  judges.  3.  The  analogy  between  notes  and  mov- 
ables or  goods,  is  expressly  denied  in  the  leading  cases  on 
this  head.  Thus,  in  reply  to  an  argument  founded  on  that 
similarity,  Lord  Mansfield  answers  (1  Burr.  457):  '  The 
whole  fallacy  of  the  argument  rests  upon  comparing  bank 
notes  to  what  they  do  not  resemble,  and  what  they  ought 
not  to  be  compared  to,  viz.,  goods,  or  securities,  or  docu- 
ments for  debts.  Now,  they  are  not  goods,  nor  securities, 
nor  similar  to  them ;  they  are  treated  as  cash  to  all  purposes/ 
etc."  (Saltus  v.  Everett,  20  Wend.  267,  278.) 

Transfer  of  title  by  consent  of  owner. — "After  a  careful 
examination  of  all  the  English  cases  and  those  of  this  state, 
that  have  been  cited  or  referred  to,  I  come  to  this  general 
conclusion,  that  the  title  of  property  in  things  movable  can 
pass  from  the  owner  only  by  his  own  consent  and  voluntary 
act,  or  by  operation  of  law;  but  that  the  honest  purchaser 
who  buys  for  a  valuable  consideration,  in  the  course  of  trade, 
without  notice  of  any  adverse  claim,  will  be  protected  in  his 
title  against  the  original  owner  in  those  cases,  and  in  those 
only,  where  such  owner  has  by  his  own  direct  voluntary  act 
conferred  upon  the  person  from  whom  the  bona  fide  vendee 
derives  title,  the  apparent  right  of  property  as  owner,  or  of 
disposal  as  an  agent.  I  find  two  distinct  classes  under  this 
head,  and  no  more."  (Saltus  v.  Everett,  20  Wend.  267, 
279.) 

Bona  fide  purchasers  from  fraudulent  vendee. — (1)  "  The 

first  is,  when  the  owner  with  the  intention  of  sale,  has  in  any 
way  parted  with  the  actual  property  of  his  goods,  with  his 
own  consent,  though  under  such  circumstances  of  fraud  or 
error,  as  would  make  that  consent  revocable,  rescind  the 
sale,  and  authorize  the  recovery  of  the  goods  as  against  such 
vendee.  But  if  the  property  passes  into  the  hands  of  honest 
purchasers,  the  first  owner  must  bear  the  loss."  (Saltiis  v. 
Everett,  20  Wend.  267,  279.) 
5 


66  SUMMARY  OF  SALES. 

In  the  earlier  cases,  notwithstanding  the  apparent  inten- 
tion of  the  defrauded  vendor  to  transfer  the  title  to  the 
fraudulent  vendee,  it  seems  to  have  been  held  that  title-  did 
not  pass.  {Read  v.  Hutchinson,  3  Camp.  352;  Noble  v. 
Adams,  7  Taunt.  59;  Bristol  v.  Wilsmore,  1  B.  &  C.  514; 
Ferguson  v.  Carrington,  9  B.  &  C.  59 ;  Durell  v.  Haley,  1 
Paige,  492;  Cary  v.  Rotating,  1  Hill,  311;  Hotchkin  v. 
Third  Nat.  Bank,  127  N.  Y.  329.)  In  1866,  however,  it 
was  finally  settled  that  title  does  pass,  the  court  saying,  in 
Pease  v.  Gloahec,  L.  R.  1  P.  C.  219,  that  "  When  a  vendee 
obtains  possession  of  a  chattel  with  the  intention  by  the 
vendor  to  transfer  both  the  property  and  possession,  although 
the  vendee  has  committed  a  false  and  fraudulent  misrepre- 
sentation in  order  to  effect  the  contract  or  obtain  the  pos- 
session, the  property  vests  in  the  vendee  until  the  vendor 
has  done  some  act  to  disaffirm  the  transaction;  and  the  legal 
consequence  is,  that  if  before  the  disaffirmance  the  fraudu- 
lent vendee  has  transferred  either  the  whole  or  a  partial  in- 
terest in  the  chattel  to  an  innocent  transferee,  the  title  of 
such  transferee  is  good  against  the  vendor."  And  in 
American  Sugar  Refining  Co.  v.  Fancher,  145  N.  Y.  552, 
560,  it  is  said  that  "  it  is  the  law  of  this  state,  as  in  Eng- 
land, that  title  passes  on  such  a  sale  to  the  fraudulent 
vendee." 

(2)  "  The  other  class  of  cases  in  which  the  owner  loses 
the  right  of  following  and  reclaiming  his  property  is,  where 
he  has,  by  his  own  voluntary  act  or  consent,  given  to  an- 
other such  evidence  of  the  right  of  selling  his  goods  as, 
according  to  the  custom  of  trade,  or  the  common  understand- 
ing of  the  world,  usually  accompanies  the  authority  of  dis- 
posal; or,  to  use  the  language  of  Lord  Ellenborough,  when 
the  owner,  '  has  given  the  external  indicia  of  the  right  of 
disposing  of  his  property/  Here  it  is  well  settled  that,  how- 
ever the  possessor  of  such  external  indicia  may  abuse  the 
confidence  of  his  principal,  a  sale  to  a  fair  purchaser  divests 
the  first  title,  and  the  authority  to  sell  so  conferred,  whether 
real  or  apparent,  is  good  against  him  who  gave  it. 


THE  TRANSFER  OF  TITLE.  67 

"  Thus  the  consignee,  in  a  bill  of  lading,  is  furnished 
by  his  consignor  with  such  evidence  of  right  of  disposal, 
according  to  the  custom  and  law  of  trade,  so  that  the  bona 
fide  holder  of  the  bill  indorsed  by  the  consignee  is  entitled 
to  all  the  rights  of  property  of  the  consignor  in  those  goods, 
if  bought  fairly  in  the  course  of  business,  although  the 
actual  consignee,  under  whose  indorsement  he  holds,  has  no 
right  to  the  goods  as  against  the  former  owner.  If  such 
goods  were  not  paid  for,  they  might  be  stopped  in  transitu 
by  the  owner,  unless  his  consignee  has  already  assigned  his 
bill  of  lading;  but  that  assignment  divests  the  owner  of  his 
right  of  stoppage  against  such  assignee."  (Saltus  v.  Everett, 
20  Wend.  267,  280.)  See,  also,  §§  27-40  of  the  Uniform 
Sales  Act  for  provisions  relating  to  negotiable  documents 
of  title. 

Possession  intrusted  to  one  whose  common  business  it  is 
to  sell. — "Again,"  says  Senator  Verplanck,  in  Saltus  v. 
Everett,  20  Wend.  267,  281,  "  the  owner  may  lose  the  right 
of  recovering  his  goods  against  purchasers,  by  exhibiting  to 
the  world,  a  third  person  as  having  power  to  sell  and  dis- 
pose of  them ;  and  this,  not  only  by  giving  a  direct  authority 
to  him,  but  by  conferring  an  implied  authority.  Such  an 
authority  may  be  implied  by  the  assent  to  and  ratification 
of  prior  similar  dealings,  so  as  to  hold  such  person  out  to 
those  with  whom  he  is  in  the  habit  of  trading,  as  authorized 
to  buy  or  sell.  It  may  be  inferred  from  the  nature  of  the 
business  of  the  agent,  with  fit  accompanying  circumstances." 
In  the  leading  case  of  Pickering  v.  Busk,  15  East,  38,  Lord 
Ellenborough  said :  "  If  the  principal  send  his  commodity 
to  a  place,  where  it  is  the  ordinary  business  of  the  person  to 
whom  it  is  confided  to  sell,  it  must  be  intended  that  the 
commodity  was  sent  thither  for  the  purpose  of  sale.  If 
the  owner  of  a  horse  send  it  to  a  repository  of  sale,  can  it  be 
implied  that  he  sent  it  thither  for  any  other  purpose  than 
that  of  sale?  Or  if  one  send  goods  to  an  auction-room,  can 
it  be  supposed  that  he  sent  them  thither  merely  for  safe 


68  SUMMAEY    OF    SALES. 

custody?  Where  the  commodity  is  sent  in  such  a  way  and 
to  such  a  place  as  to  exhibit  an  apparent  purpose  of  sale, 
the  principal  will  be  bound,  and  the  purchaser  safe."  This 
is  straining  the  law  of  intent  to  the  breaking  point.  Un- 
doubtedly, intrusting  one,  whose  common  business  it  is  to 
sell,  with  the  possession  of  goods,  may  be  some  evidence  of 
authority  to  sell,  but  alone  and  of  itself  is  obviously  insuf- 
ficient, unless  there  be  also  some  "  fit  accompanying  cir- 
cumstances," although  it  may  open  the  door  to  the  commis- 
sion of  fraud.  In  Biggs  v.  Evans,  I  Q.  B.  (1894)  88, 
Wills,  J.,  says :  "  In  one  sense  every  person  who  intrusts 
an  article  to  any  person  who  deals  in  second-hand  articles 
of  that  description  enables  him,  if  so  disposed,  to  commit  a 
fraud  by  selling  it  as  his  own.  A  man  who  lends  a  book  to 
a  second-hand  bookseller  puts  it  into  his  power,  in  the  same 
sense,  to  sell  it  as  his  own.  A  man  who  intrusts  goods  for 
safe  custody  to_ji  wharfingefTwho  also  deals^  in  hi^T  <yftiT 
goodgjjjr  in  other  people's  goods  intrusted  tojbim  for  sale, 
in  such  a  jgnsejmables  him  to  commit  a  f ralicTby  selling  them 
to  a  customer.  EuLsuch  a  transaction  clearly  could  not_gjve 
jjtitle  to  ajmrchaser  as  a^ainst_the_owiLer." 

Who  is  a  bona  fide  purchaser  for  value? — In  Barnard 
v.  Campbell,  55  !N".  Y.  456,  the  defendants  claimed  to  be 
bona  fide  purchasers  for  value  from  the  fraudulent  vendee 
of  the  plaintiffs,  and  the  court  said,  at  p.  462 :  "  The  de- 
fendants can  only  resist  the  claim  of  the  plaintiffs  to  the 
merchandise  by  establishing  an  equitable  estoppel,  founded 
upon  the  acts  of  the  plaintiffs,  and  in  the  application  of  the 
rule  applied  by  the  judge  at  the  circuit,  by  which,  as  between 
two  persons  equally  innocent,  a  loss  resulting  from  the 
fraudulent  acts  of  another  shall  rest  upon  him  by  whose  act 
or  omission  the  fraud  has  been  made  possible.  This  rule, 
general  in  its  terms,  only  operates  to  protect  those  who,  in 
dealing  with  others,  exercise  ordinary  caution  and  prudence, 
and  who  deal  in  the  ordinary  way  and  in  the  usual  course  of 
business  and  upon  the  ordinary  evidences  of  right  and 


THE  TRANSFER  OF  TITLE.  69 

authority  in  those  with  whom  they  deal,  and  as  against  those 
who  have  voluntarily  conferred  upon  others  the  usual  evi- 
dences or  indicia  of  ownership  of  property,  or  an  apparent 
authority  to  deal  with  and  dispose  of  it.  In  such  case,  for 
obvious  reasons,  the  law  raises  an  equitable  estoppel,  and, 
as  against  the  real  owner,  declares  that  the  apparent  title 
and  authority  which  exists  by  his  act  or  omission  shall  quoad 
persons  acting  and  parting  with  value  upon  the  faith  of  it, 
stand  for  and  be  regarded  as  the  real  title  and  authority. 

•  •  • 

"  Two  things  must  concur  to  create  an  estoppel  by  which 
an  owner  may  be  deprived  of  his  property  by  the  act  of  a 
third  person,  without  his  assent,  under  the  rule  now  con- 
sidered. 1.  The  owner  must  clothe  the  person  assuming 
to  dispose  of  the  property  with  the  apparent  title  to,  or 
authority  to  dispose  of  it;  and,  2.  The  person  alleging  the 
estoppel  must  have  acted  and  parted  with  value  upon  the 
faith  of  such  apparent  ownership  or  authority,  so  that  he 
will  be  the  loser  if  the  appearances  to  which  he  trusted  are 
not  real.  In  this  respect  it  does  not  differ  from  other 
estoppels  in  pais." 

As  to  what  constitutes  valuable  consideration  in  such 
cases,  courts  differ.  It  means,  says  the  court  in  Hurd  v. 
Bickford,  85  Me.  217,  220,  "  something  more  than  the  dis- 
charge of  a  debt  that  revives,  when  the  consideration  for 
its  discharge  fails.  It  means  the  parting  with  some  value 
that  cannot  be  actually  restored  by  operation  of  law,  leaving 
the  purchaser  in  a  changed  condition,  so  that  he  may  lose 
something  beside  his  bargain.  (Barnard  v.  Campbell,  58 
N".  Y.  73;  Stevens  v.  Brennan,  79  N.  Y.  258;  Hyde  v. 
Ellery,  18  Md.  496,  501;  McGraw  v.  Henry,  83  Mich.  442; 
George  v.  Kimball,  24  Pick.  234-240.)  The  same  rule 
applies  to  chattels  pledged.  (Goodwin  v.  Massachusetts 
Loan  Co.,  152  Mass.  199.) 

"  True,  the  discharge  of  an  antecedent  debt,  in  one  sense, 
is  a  valuable  consideration;  but,  if  the  title  of  the  vendee 


70  SUMMARY  OF  SALES. 

fails,  the  discharge  of  his  debt  fails  also,  and  he  has  lost 
nothing  by  the  transaction."  According  to  these  decisions, 
a  bona  fide  purchaser  who  takes  property  in  payment  of  an 
antecedent  debt  is  not  a  purchaser  for  value. 

Other  jurisdictions  hold  to  the  contrary.  See  Taylor  v. 
Bldkelock,  32  Ch.  Div.  560,  570;  Shufeldt  v.  Pease,  16  Wis. 
659;  and  Butters  v.  Haughwont,  42  111.  18,  wherein,  at  p. 
32,  the  court  says:  "A  creditor  who  takes  goods  in  pay- 
ment, in  whole  or  in  part,  of  a  precedent  debt,  in  good  faith, 
having  no  reason  to  suspect  any  other  claim  existing  to  the 
property,  and  having  no  reason  to  doubt  his  title,  is  lulled 
into  security.  He  rests  in  the  belief  that  his  debt  is  paid, 
and,  in  that  belief,  foregoes  all  effort  to  seek  other  payment 
or  security."  According  to  Bowen,  L.  J.,  in  Taylor  v.  BlaTce- 
lock,  32  Ch.  Div.  560,  570,  it  was  always  the  rule  of  the  com- 
mon law,  that  one  who  takes  property  in  payment  of  an  ante- 
cedent debt  is  a  purchaser  for  value.  "  The  man  who  has  a 
debt  due  him,  when  he  is  paid  the  debt  has  converted  the  right 
to  be  paid  into  actual  possession  of  the  money;  he  cannot 
have  both  the  right  to  be  paid  and  the  possession  of  the 
money.  In  taking  payment,  he  relinquishes  the  right  for 
the  fruition  of  the  right.  In  such  a  case,  the  transaction  is 
completed;  and  to  invalidate  that  transaction  would  be  to 
lull  creditors  into  a  false  security,  and  to  unsettle  business." 

According  to  section  24  of  the  Uniform  Sales  Act, 
"  Where  the  seller  of  goods  has  a  voidable  title  thereto,  but 
his  title  has  not  been  avoided  at  the  time  of  the  sale,  the 
buyer  acquires  a  good  title  to  the  goods,  provided  he  buys 
them  in  good  faith,  for  value,  and  without  notice  of  the 
seller's  defect  of  title,"  and,  according  to  section  76, 
"  '  value '  is  any  consideration  sufficient  to  support  a  simple 
contract.  An  antecedent  or  pre-existing  claim,  whether  for 
money  or  not,  constitutes  value  where  goods  or  documents 
of  title  are  taken  either  in  satisfaction  thereof  or  as  security 
therefor." 


THE  TRANSFEE  OF  TITLE.  71 

Remedies  of  defrauded  vendors. — "  If  a  buyer  obtains  by 
fraud  the  seller's  assent  to  transfer  the  ownership  of  goods, 
there  is  no  doubt  that  the  buyer  gains  title  thereby.  Yet 
there  is  no  more  doubt  that  the  seller  may  regain  his  title 
by  his  own  election  so  to  do.  Not  only  may  he  bring  trover, 
but  he  may  also  bring  replevin.  . ,:  .  .4  This  is  nothing 
else  than  specific  enforcement  of  the  obligation  of  the  fraudu- 
lent buyer  to  return  the  title  wrongfully  acquired  by  him. 
.  .  .  If  the  property  in  question  is  land  and  the  buyer 
has  fraudulently  acquired  a  conveyance,  the  seller  must  go 
into  equity  in  order  to  get  a  reconveyance,  but  in  the  case 
of  a  sale  of  goods  he  can  regain  title  to  what  he  has  parted 
with  and  revest  the  buyer  with  title  to  the  consideration 
without  this  procedure."  (Williston  on  Sales,  §  567,  and 
cases  cited.) 

In  Holler  v.  Tuska,  87  K  Y.  166,  169,  Danforth,  J.,  says: 
"  The  plaintiffs,  upon  discovery  of  the  fraud,  had  a  choice 
of  remedies  —  an  action  .  .  .  for  the  price  according 
to  the  terms  of  sale  or  replevin  of  the  property,  upon  the 
ground  that  by  reason  of  the  fraud  the  contract  of  sale  was 
avoided.  No  right  of  the  defendant  intervened,  for  he  was 
not  an  innocent  party,  .  .  .  The  plaintiffs  manifested 
their  election  by  bringing  this  action  [replevin].  After 
that,  the  other  way  of  redress  was  not  open  to  them;  for 
according  to  Comyn  (Dig.  Elect.  C.,  2),  if  a  man  once  de- 
termines his  election  it  shall  be  determined  forever.  Hence, 
they  could  never  successfully  assert  a  claim  against  the  pur- 
chaser under  the  contract,  for  the  election  to  disaffirm  it 
had  been  manifested,  and  to  revoke  it  was  not  in  their 
power." 

As  before  observed,  however,  a  bona  fide  purchaser  for 
value  from  a  fraudulent  vendee  acquires  an  indefeasible 
title. 

Fraud  by  impersonation. — "Whenever  goods  are  ob- 
tained from  their  owner  by  fraud,  we  must  distinguish 
whether  the  facts  show  a  sale  to  the  party  guilty  of  the 


72  SUMMARY  OF  SALES. 

fraud,  or  a  mere  delivery  of  the  goods  into  his  possession, 
induced  by  fraudulent  devices  on  his  part.  In  other  words, 
we  must  ask  whether  the  owner  intended  to  transfer  both 
the  property  in,  and  the  possession  of,  the  goods  to  the  per- 
son guilty  of  the  fraud,  or  to  deliver  nothing  more  than  the 
bare  possession.  In  the  former  case,  there  is  a  contract  of 
sale,  however  fraudulent  the  device,  and  the  property  passes ; 
but  not  in  the  latter  case."  (Benjamin  on  Sales  [5th  Eng. 
ed.],  457.)  In  the  former  case,  a  bona  fide  purchaser  for 
value  from  the  fraudulent  vendee  will  obtain  an  indefeasible 
title ;  in  the  latter  case,  a  bona  fide  purchaser  for  value  from 
one  who,  by  fraudulent  device,  has  acquired  merely  pos- 
session of,  but  not  the  title  to,  goods,  will  obtain  no  title 
at  all,  simply  because  his  vendor  had  no  title. 

The  law,  as  thus  stated,  is  simple  and  clear;  the  only 
difficulty  experienced  has  been  in  its  application,  and  the 
divergence  of  view  therein  has  resulted  from  diverse  con- 
sideration of  the  fact  of  intention  of  the  seller  to  transfer 
title.  That  intention  is  not  properly  sought  in  the  inner  and 
hidden  recesses  of  the  seller's  brain,  but  rather  in  outward 
manifestations  thereof,  as  disclosed  by  word,  or  act,  or  both, 
of  the  seller.  (1)  If  B,  falsely  representing  that  he  is 
solvent,  requests  A  to  sell  and  deliver  certain  goods  to  him 
on  credit,  and  A,  in  response  to  that  request,  however  com- 
municated, delivers  the  goods  to  B  personally,  or  to  a  car- 
rier for  transportation  to  B,  or  to  a  person  nominated  by  B, 
according  as  B  has  directed,  the  outwardly  manifested  intent 
of  A,  notwithstanding  his  inner  purpose  to  sell  only  to  a 
person  of  pecuniary  responsibility,  presently  to  transfer  title 
and  possession  to  B,  obviously  appears  from  his  activity  in 
response  to  B's  request,  only  then,  and  not  before  or  other- 
wise. (2)  If  B,  in  A's  immediate  presence,  falsely  repre- 
senting that  he  is  C,  a  person  of  pecuniary  responsibility, 
requests  A  to  sell  and  deliver  certain  goods  to  him  on  credit, 
and  A,  in  response  to  that  request,  delivers  the  goods  to  B 
personally,  or  to  a  carrier  for  transportation  to  B,  or  to  a 
person  nominated  by  B,  according  as  B  has  directed,  the 


THE  TRANSFER  OF  TITLE.  73 

outwardly  manifested  intent  of  A,  notwithstanding  his  inner 
purpose  to  sell  only  to  C,  a  person  of  pecuniary  responsi- 
bility, presently  to  transfer  title  and  possession  to  B, 
obviously  appears  from  his  activity  in  response  to  B's  request, 
only  then,  and  not  before  or  otherwise.  "  Fraud  only  be- 
comes important,  as  such,"  says  the  court  in  Rodliff  v.  Dai- 
linger,  141  Mass.  1,  "  When  a  sale  or  contract  is  complete 
in  its  formal  elements,  and  therefore  valid  unless  repudiated, 
but  the  right  is  claimed  to  rescind  it.  It  goes  to  the  motives 
for  making  the  contract,  not  to  its  existence;  as  when  a 
vendee  expressly  or  impliedly  represents  that  he  is  solvent  and 
intends  to  pay  for  goods,  when  in  fact  he  is  insolvent,  and  has 
no  reasonable  expectation  of  paying  for  them;  or,  being 
identified  by  the  senses  and  dealt  with  as  the  person  so 
identified,  says  that  he  is  A,  when  in  fact  he  is  B."  See, 
also,  Edmunds  v.  Merchants'  Transportation  Co.,  135  Mass. 
283;  Rickey  v.  McDonald,  151  Ala.  497.  (3)  "On  the 
other  hand,"  says  Professor  Williston  (Sales,  §  635),  "if 
goods  are  ordered  by  mail  by  a  fraudulent  person,  the  name 
of  a  responsible  buyer  being  used  as  a  fraudulent  means  of 
inducing  the  seller  to  send  forward  the  goods,  the  seller's 
primary  intent  is  to  sell  the  goods  to  the  person  whose  name 
appears  to  be  signed  to  the  letter.  The  seller  also  intends  to 
sell  the  goods  to  the  person  who  wrote  the  letter.  He 
believes  that  these  two  intentions  are  harmonious  because 
he  believes  the  persons  are  one  and  the  same.  As  they  are 
not  the  same,  both  intentions  cannot  be  made  effectual. 
Here  the  primary  intent  is  to  sell  to  the  person  whose  name 
appears  signed  to  the  letter;  that  is  the  essential  matter 
in  the  seller's  mind.  The  belief  that  the  writer  of  the 
letter  is  that  person  is  rather  an  inducement  .to  the  intent 
to  sell  to  the  person  indicated  by  the  signature  than  itself  the 
governing  purpose."  Support  therefore  is  found  in  the  Eng- 
lish case  of  Gundy  v.  Lindsay,  3  App.  Gas.  459,  and  seem- 
ingly in  Price  v.  Oswego  &  Syracuse  R.  Co.,  50  N.  Y.  213. 
If  it  be  conceded  that  "  where  the  buyer  in  person  obtains  the 
assent  of  the  buyer  [seller]  to  a  sale  to  him  of  the  goods  by 


74  SUMMABY    OF    SALES. 

pretending  to  be  some  one  else,  title  passes  "  (Williston  on 
Sales,  §  635),  the  same  result  must  inevitably  follow  where 
the  same  kind  of  buyer  orders  goods  by  mail,  because  two 
intents  are  equally  present  in  each  case,  viz.,  to  sell  to  the 
real  person  and  to  sell  to  the  person  who  makes  the  request 
by  letter,  and  whichever  is  the  primary  or  governing  intent 
in  one  case  must  of  necessity  be  the  primary  or  governing 
intent  in  the  other  case.  What  matters  it  how  or  from  what 
distance  the  request  of  the  fraudulent  buyer  to  sell  is  com- 
municated to  the  seller,  whether  by  means  of  sound  waves, 
without  a  wire,  within  three  feet  or  within  ten  feet,  or  by 
means  of  sound  waves,  with  or  without  a  wire,  within  three 
miles  or  within  three  hundred  miles,  or  by  means  of  signs 
for  sounds  within  three  feet,  three  miles,  or  three  hundred 
miles  ?  In  each  and  every  instance,  when  the  defrauded  seller 
acts,  obviously  we  determine  and  must  determine  his  intent 
to  pass  title  from  his  acts  as  he  is  moved  to  act  by  the  request 
of  the  fraudulent  buyer,  because  it  is  not  until  moved  by  such 
request  that  an  act,  if  indicative  of  aught  is  indicative  of 
intent,  is  performed  at  all,  and  by  what  the  defrauded  seller 
does,  not  by  what  he  secretly  intends,  must  the  intention  to 
pass  title  be  determined. 

It  may  be  of  interest  to  note  in  this  connection  that,  in 
Cundy  v.  Lindsay,  supra,  the  letters  of  the  fraudulent  buyer 
to  Lindsay  &  Co.  were  written  as  from  "  37  Wood  Street, 
Cheapside,"  and  were  signed  "  Blenkiron  &  Co."  While  it 
appears  that  there  was  a  respectable  firm  of  W.  Blenkiron  & 
Son  at  123  Wood  street,  of  whose  respectability,  but  not  the 
number  of  the  house,  Lindsay  &  Co.  knew,  the  goods  and  the 
invoices  shipped  by  Lindsay  &  Co.  were  not  addressed  to 
W.  Blenkiron  &  Son,  but  to  Blenkiron  &  Co.,  37  Wood  Street. 
This,  surely,  was  not  a  proper  manifestation  of  the  intention 
of  Lindsay  &  Co.  to  transfer  title  to  W.  Blenkiron  &  Son,  so 
easily  within  their  power  properly  to  manifest  by  addressing 
the  goods  and  invoices  at  least  to  W.  Blenkiron  &  Son,  even 
though  they  could  not  recall  the  true  number  of  the  house 
in  Wood  Street  in  which  that  firm,  known  to  them,  carried  on 


THE  TRANSFER  OF  TITLE.  75 

business.  Lindsay  &  Co.  did  not  act  until  they  were  moved 
to  act  by  the  request  communicated  to  them  in  the  letter  of 
the  fraudulent  buyer,  and  when  they  acted  they  followed  im- 
plicitly the  directions  of  that  letter  and  manifested  their 
intention  to  sell  to  the  author  of  that  letter,  and  did  not,  as 
was  within  their  power,  manifest  their  inner  intent  to  sell  to 
W.  Blenkiron  &  Son,  and  should  therefore  have  been  bound 
by  such  intention  as  they  had  manifested. 

If,  however,  a  person  wrongfully  obtains  possession  of 
goods  without  any  act  of  the  owner  contributing  thereto,  and 
without  any  act  of  the  owner  indicative  of  intention  to  trans- 
fer title  to  such  person,  such  person,  of  course,  obtains  no 
title  and  of  course,  can  pass  no  title  to  any  bona  fide  pur- 
chaser foi  value.  (Barker  v.  Dinsmore,  72  Pa.  St.  427.) 
It  a  person  falsely  represents  that  he  is  agent  of  another  on 
whose  behalf  he  professes  to  buy,  then  although  he  may  obtain 
possession  of  the  goods  by  an  act  of  the  owner,  there  being 
no  act  of  the  owner  indicative  of  an  intention  to  pass  title 
to  such  professing  agent,  the  possessor  obtains  no  title  to  and, 
of  course,  can  pass  no  title  to  any  bona  fide  purchaser  for 
value.  (Rodliff  v.  Dallmger,  141  Mass.  1.) 

Bona  fide  purchaser  from  conditional  vendee. —  If  a  sale 
be  made  with  a  so-called  condition  subsequent  attached,  title 
passes  and,  of  course,  may  readily  be  passed  on.  If  posses- 
sion of  goods  be  delivered,  however,  upon  a  contract  to  sell, 
but  with  title  reserved  until  the  performance  of  some  con- 
dition, customarily,  but  improperly,  called  a  conditional  sale, 
title  does  not  pass  until  the  condition  is  fulfilled,  and  hence 
may  not  meanwhile  be  passed  on  to  others  even  though  they 
purchase  without  notice  and  for  value.  "  The  vendee,  in 
such  case,  acquires  no  property  in  the  goods.  He  is  only  a 
bailee  for  a  specific  purpose.  The  delivery,  which  in  ordi- 
nary cases  passes  the  title  to  the  vendee,  must  take  effect 
according  to  the  agreement  of  the  parties,  and  can  operate  to 
vest  the  property,  only  when  the  contingency  contemplated 
by  the  contract  arises.  The  vendee,  therefore,  in  such  case, 


76  SUMMARY  OF  SALES. 

having  no  title  to  the  property,  can  pass  none  to  others.  He 
has  only  a  bare  right  of  possession;  and  those  who  claim 
under  him,  either  as  creditors  or  purchasers,  can  acquire  no 
higher  or  better  title.  Such  is  the  necessary  result  of  carry- 
ing into  effect  the  intention  of  the  parties  to  a  conditional 
sale  and  delivery.  Any  other  rule  would  be  equivalent  to 
the  denial  of  the  validity  of  such  contracts.  But  they  cer- 
tainly violate  no  rule  of  law,  nor  are  they  contrary  to  sound 
policy.  .  .  « 

"A  mere  possession  by  the  vendee  carries  with  it  no  right 
or  authority  to  transfer  the  title.  That  continues  in  the 
vendor  until  the  conditions  of  sale  and  delivery  are  com- 
plied with  by  the  vendee,  or  are  waived  by  the  vendor.  And 
this  constitutes  the  precise  distinction  between  a  sale  and 
delivery  of  goods  on  condition,  and  a  sale  procured  by  fraud 
or  false  representations  on  the  part  of  the  vendee.  In  the 
latter  case,  the  property  passes  by  the  sale  and  delivery, 
because  such  was  the  agreement  and  intent  of  the  parties. 
Therefore,  the  vendee,  having  the  property  as  well  as  the 
possession  of  the  goods,  can  pass  a  good  title  to  a  purchaser, 
who  takes  the  goods  in  good  faith  and  without  notice  of  the 
fraud.  .  .  .  But,  in  the  case  of  a  conditional  sale  and 
delivery,  the  title  does  not  pass  from  the  vendor  until  the 
condition  is  fulfilled.  The  vendee  obtains  no  right,  under 
such  sale,  to  dispose  of  the  property,  but  only  to  hold  it 
until  the  terms  of  the  contract  are  complied  with."  (Coggill 
v.  Hartford  &  New  Haven  R.  R.  Co.,  3  Gray,  545,  548.) 
See,  also,  Harkness  v.  Russell,  118  TJ.  S.  663;  Smith  v. 
Lynes,  5  K  Y.  41 ;  Cole  v.  Mann,  62  1ST.  Y.  1. 

"  Conditional  sales  have  become  so  common  under  modern 
methods  of  business  and  are  so  deceptive  both  to  purchasers 
from  the  buyer  and  to  the  buyer's  creditors,  since  the  buyer 
not  only  has  possession  of  the  property  but  ordinarily  is  en- 
titled to  use  it  and  does  use  it  as  if  it  were  his  own,  that 
recording  acts  have  been  passed  in  many  States.  The  pur- 
pose of  these  statutes  is  to  give  notice  to  the  public  of  the 
seller's  title  and  to  invalidate  that  title  unless  the  bargain 


THE  TKANSFEE  OF  TITUS.  77 

is  in  writing  and  a  record  of  it  made.  Such  statutes  have 
been  passed  in  Alabama,  Arizona,  Colorado,  Connecticut, 
Florida,  Georgia,  Iowa,  Kansas,  Maine,  Minnesota,  Missouri, 
Montana,  Nebraska,  New  Hampshire,  New  Jersey,  New 
York,  North  Carolina,  North  Dakota,  Ohio,  Oklahoma,  South 
Carolina,  Texas,  Vermont,  Virginia,  Washington,  West  Vir- 
ginia, Wisconsin,  Wyoming.  In  Tennessee  conditional  sales 
are  invalid  unless  in  writing,  but  record  is  not  required.  In 
Massachusetts  a  less  comprehensive  statute  exists  applying 
only  to  household  furniture,  and  aimed  primarily  at  protect- 
ing the  conditional  buyer,  which  requires  the  contract  to  be 
written  and  a  copy  to  be  delivered  to  the  buyer."  (Williston 
on  Sales,  §  327,  and  statutes  and  cases  cited.) 

For  present  provisions  applicable  to  conditions  and  reser- 
vations in  contracts  for  the  sale  of  goods  and  chattels  in  New 
York,  see  Personal  Property  Law,  being  chapter  41  of  the 
Consolidated  Laws  of  1909,  §  62  et  seq.  For  a  recognition 
of  such  statutes  everywhere,  see  §  20  (1),  and  §  23  (2)  (a), 
of  the  Uniform  Sales  Act 


PART  III. 
WARRANTY. 

Warranty  defined. — ^A  warranty  is^  an  express  or  im- 
plied statement  of  something  which  the  party  undertakes 
shall  be  part  of  a  contract;  and  though  part  of  the  contract, 
yet  collateral  to  the  express  object  of  it."  (Lord  Abinger,  in 
Chanter  v.  Hopkins,  4  M.  &  W.  399.) 

"A  warranty  is  a  separate,  independent,  collateral  stipu- 
lation, on  the  part  of  the  vendor,  with  the  vendee,  for  which 
the  sale  is  the  consideration,  for  the  existence  or  truth  of 
some  fact,  relating  to  the  thing  sold.  It  is  not  strictly  a  con- 
dition, for  it  neither  suspends  nor  defeats  the  completion  of 
the  sale,  the  vesting  of  the  thing  sold  in  the  vendee,  nor  the 
right  to  the  purchase  money  in  the  vendor.  And,  notwith- 
standing such  warranty,  or  any  breach  of  it,  the  vendee  may 
hold  the  goods,  and  have  a  remedy  for  his  damages  by  action." 
(Chief  Justice  Shaw,  in  Dorr  v.  Fisher,  1  Gush.  271,  273.) 

Development  of  warranty. — "  The  ancient  method  of 
declaring  was  in  tort  on  the  warranty  broken,  and  that  was 
just  going  out  of  general  practice  when  the  case  of  Stuart  v. 
Wilkins,  1  Dougl.  18,  was  discussed,  because  it  was  found 
more  convenient  to  declare  in  assumpsit  for  the  sake  of  add- 
ing the  money  counts.  So  general  was  the  former  method, 
that  declarations  in  that  form  were  familiar  in  every  arrange- 
ment of  precedents  in  tort.  And  the  more  modern  practice 
of  declaring  in  assumpsit  in  these  cases  has  not  prevailed 
generally  above  forty  years."  (Lord  Ellenborough  in  Wil- 
liamson v.  Allison,  2  East,  446,  in  1802.) 

"  This  form  of  action  [action  of  deceit  against  the  vendor 
of  a  chattel  upon  a  false  warranty],  .  .  .,  is  ancient, 
being  older,  by  more  than  a  century,  than  special  assumpsit. 
The  words  super  se  assumpsit  were  not  used,  it  is  true,  in  a 
count  upon  a  warranty;  but  the  notion  of  undertaking  was 
equally  well  conveyed  by  '  warrantizando  vendidit.' 

[78] 


WABKANTY.  79 

"  Notwithstanding  the  undertaking,  this  action  also  was, 
in  its  origin,  a  pure  action  of  tort.  In  what  is,  perhaps,  the 
earliest  reported  case  upon  a  warranty  (Fitz.  Ab.  Monst.  de 
Faits,  pi.  160  [1383]), 'the  defendant  objects  that  the  action 
is  in  the  nature  of  covenant,  and  that  the  plaintiff  shows  no 
specialty  but  '  non  allocatur,  for  it  is  a  writ  of  trespass.' 
There  was  regularly  no  allusion  to  consideration  in  the  count 
in  case;  if,  by  chance,  alleged,  it  counted  for  nothing. 
(Moor  v.  Russel,  Skin.  104;  2  Show.  284,  s.  c.)  How  re- 
mote the  action  was  from  an  action  of  contract  appears 
plainly  from  a  remark  of  Choke,  J. :  'If  one  sells  a  thing  to 
me,  and  another  warrants  it  to  be  good  and  sufficient,  upon 
that  warranty  made  by  parql,  I  shall  not  have  an  action  of 
deceit;  but  if  it  was  by  deed,  I  shall  have  an  action  of  cove- 
nant.' (Y.  B.  11  Ed.  IV.  6,  pi.  11.)  That  is  to  say,  the 
parol  contract  of  guaranty,  so  familiar  in  later  times,  was 
then  unknown.  The  same  judge,  and  Brian,  C.  J.,  agreed, 
although  Littleton,  J.,  inclined  to  the  opposite  view,  that  if  a 
servant  warranted  goods  which  he  sold  for  his  master,  that 
no  action  would  lie  on  the  warranty.  The  action  sounding 
in  tort,  the  plaintiff,  in  order  to  charge  the  defendant, 
must  show,  in  addition  to  his  undertaking,  some  act  by 
him,  that  is,  a  sale;  but  the  owner  was  the  seller,  and  not 
the  friend  or  servant,  in  the  cases  supposed.  A  contract, 
again,  is,  properly,  a  promise  to  act  or  forbear  in  the  future. 
But  the  action  under  discussion  must  be,  as  Choke,  J.,  said, 
in  the  same  case,  upon  a  warranty  of  a  thing  present,  and 
not  of  a  thing  to  come.  A  vendor  who  gives  a  false  warranty 
may  be  charged  to-day,  of  course,  in  contract;  but  the  con- 
ception of  such  a  warranty,  as  a  contract,  is  quite  modern. 
Stuart  v.  Wilkins,  3  Doug.  18,  decided  in  1778,  is  said  to 
have  been  the  first  instance  of  an  action  of  assumpsit  upon 
a  vendor's  warranty."  (Ames'  History  of  Assumpsit,  2  Har- 
vard Law  Rev.  1,  8.) 

See,  also,  Williston  on  Sales,  §§  195,  196,  and  Shippen  v. 
Bowen,  122  U.  S.  575. 


80  SUMMARY  OF  SALES. 

Misuse  of  word  "  warranty." — "  There  is  much  misuse  of 
the  term  '  warranty.'  It  is  applicable  properly  only  to  agree- 
ments which  are  collateral  to  the  main  object  of  a  contract  of 
sale,  namely,  the  passage  of  title ;  but  it  is  frequently  applied 
to  agreements  and  conditions  which  are  not  collateral  to  the 
passage  of  title,  but  without  the  fulfillment  of  which  no  title 
can  pass.  A  correct  use  of  the  term  is  important  chiefly  when 
it  becomes  necessary  to  consider  what  remedy  is  proper  where 
the  contract  has  not  been  fully  performed,  and  but  incident- 
ally when  it  is  being  determined  what  the  contract  originally 
included."  (Mr.  Edward  F.  McClennen,  in  11  Harvard 
Law  Kev.  3l£.) 

And,  says  Lord  Abinger,  in  Chanter  v.  Hopkins,  4  M.  &  W. 
399,  "A  good  deal  of  confusion  has  arisen  in  many  of  the 
cases  on  this  subject,  from  the  unfortunate  use  made  of  the 
word  *  warranty.'  Two  things  have  been  confounded  to- 
gether. A  warranty  is  an  express  or  implied  statement  of 
something  which  the  party  undertakes  shall  be  part  of  a 
contract;  and  though  part  of  the  contract,  yet  collateral  to 
the  express  object  of  it.  But  in  many  of  the  cases,  .  .  ., 
the  circumstance  of  a  party  selling  a  particular  thing  by  its 
proper  description,  has  been  called  a  warranty ;  and  a  breach 
of  such  contract,  a  breach  of  warranty ;  but  it  would  be  better 
to  distinguish  such  cases  as  a  non-compliance  with  a  contract 
which  a  party  has  engaged  to  fulfill;  as,  if  a  man  offers  to 
buy  peas  of  another,  and  he  sends  him  beans,  he  does  not 
perform  his  contract ;  but  that  is  not  a  warranty ;  there  is  no 
warranty  that  he  should  sell  him  peas;  the  contract  is  to 
sell  peas,  and  if  he  sells  him  anything  else  in  their  stead, 
it  is  a  non-performance  of  it.  So  if  a  man  were  to  order 
copper  for  sheathing  ships  —  that  is,  a  particular  copper, 
prepared  in  a  particular  manner;  if  the  seller  sends  him  a 
different  sort,  in  that  case  he  does  not  comply  with  the  con- 
tract :  and  though  this  may  have  been  considered  a  warranty, 
and  may  have  been  ranged  under  the  class  of  cases  relating 
to  warranties,  yet  it  is  not  properly  so." 


WARRANT  Y.  81 

Condition  and  warranty. —  Warranty  has  been  so  inter- 
woven or  confounded  with  condition,  that  it  is  exceedingly 
difficult  for  the  average  student  or  practitioner  to  obtain  a 
reasonably  clear  conception  of  the  law  of  warranty  from  text- 
books or  decisions,  so  much  of  commonly  accepted  law  being 
intermingled  with  criticism  or  with  individual  view  of  what 
the  law  should  be. 

Codification  of  the  law  relating  thereto  has  not  altogether 
cleared  the  atmosphere,  nor  has  it  been  harmonious  (compare 
the  English  and  American  acts  on  the  subject  of  warranties), 
although  the  English  Sale  of  Goods  Act  (§§  11-15  and  62) 
would  seem  to  make  a  nearer  approach  to  simplicity  and 
consistency.  "  The  Act  throughout,  so  far  as  it  relates  to 
England,"  says  Judge  Chalmers  (Sale  of  Goods  [7th  ed.], 
37),  "  draws  a  distinction  between  the  terms  '  condition '  and 
'  warranty.'  This  distinction  has  often  been  insisted  on,  but 
seldom  observed  by  judges  and  text- writers.  As  used  in  the 
Act, '  condition '  is  the  equivalent  of  the  old  term  '  dependent 
covenant,'  while  '  warranty '  is  equivalent  to  the  old  term 
'  independent  covenant '  ".  See,  also,  Burdick  on  Sales  (2d. 
ed.),  82-83,  and  Chalmers'  Sale  of  Goods  (7th  ed.),  198. 

The  distinction  in  legal  effect  between  condition  and  war- 
ranty is  important,  although,  as  before  stated,  it  has  not 
always  been  observed.  "  Condition  ia  a  statement  or  promise 
which  forms  the  basis  of  the  contract,  and  a  breach  of  it 
entitles  the  party  relying  upon  it  to  treat  the  contract  as  at 
an  end.  Warranty,  on  the  other  hand,  is,  .  .  .,  a  collat- 
eral or  subsidiary  promise,  the  breach  of  which  does  not  ordi- 
narily terminate  the  contract,  but  gives  rise  merely  to  an 
action  for  "damages. 

•l  In  practice,however,  the  distinction  between  warranty 
and  condition,  though  clear  enough  when  attended  to,  is 
frequently  lost  sight  of,  and,  especially  in  the  field  of  implied 
warranty,  many  elements  of  the  contract  which  are  really 
conditions  are  commonly  designated  warranties  which  the 
law  implies.  [See  §§  13-16  of  the  Uniform  Sales  Act.] 
The  practice  leads  to  confusion,  and  has  been  often  depre- 
6 


82  SUMMARY  OF  SALES. 

cated,  but  it  seems  to  be  too  firmly  rooted  for  extermina- 
tion/'    (Mechem  on  Sales,  §  1231.) 

Representation  and  warranty. —  Because  warranty,  in  its 
origin,  was  a  pure  action  of  tort,  Professor  Williston  (Sales, 
§  197)  says:  "  The  distinction  between  warranty  and  repre- 
sentation which  is  important  in  some  branches  of  the  law  is 
not  appropriate  here.  The_representation_of ...fact  which 
induces  a  bargain  is  a,  warranty/*  ButTlays  Mr.  Mechem 
(Sales,  §  1224),  ""Warranty  must  be  distinguished  from 
representation.  Representation  is  an  antecedent  statement 
which  is  made  to  induce  the  entering  into  the  contract,  but 
which  is  not  a  term  in  or  element  of  that  contract.  Its  pur- 
pose is  accomplished  when  the  contract  is  made.  Warranty, 
on  the  other  hand,  is,  by  the  intention  and  agreement  of  the 
parties,  a  term  in,  a  part  of,  or  an  incident  to,  that  contract, 
and  cannot  exist  without  it."  Of  course,  warranty  is  based 
upon  a  representation,  but  whether  a  representation  is  a 
warranty  or  not  depends  upon  whether  it  is  part  of,  and 
collateral  to,  the  sale  transaction.  If  not  a  part  of,  and  collat- 
eral to,  the  sale  transaction,  it  remains  mere  representation, 
the  falsity  of  which  to  the  knowledge,  culpably  or  carelessly, 
of  the  seller,  will  render  him  liable  in  tort,  but  not,  according 
to  the  generally  .accepted  modern  authorities,  in  contract  for 
breach  of  warranty.  If,  however,  the  representation  was 
part  of,  and  collateral  to,  the  sale  transaction,  and  was  false 
to  the  knowledge,  culpably  or  carelessly,  of  the  seller,  the 
buyer  may  proceed  against  him  in  contract  for  breach  of 
warranty,  because  the  representation  was  part  of,  and  collat- 
eral to,  the  sale  transaction,  or  the  buyer  may  proceed  against 
him  in  tort,  because  he  relied  to  his  damage  upon  a  repre- 
sentation made  by  the  seller  with  intent  to  deceive.  True, 
there  is,  in  such  case,  but  one  representation,  but  it  does  not 
follow  therefrom,  nor  is  it  generally  so  recognized,  that 
"  representation  "  and  "  warranty  "  are  convertible  terms. 
They  may,  to  some  extent,  appear  to  be  so,  when  the  repre- 


WARRANTY.  83 

sentation  is  part  of,  and  collateral  to,  the  sale  transaction; 
otherwise,  not. 

In  Hopkins  v.  Tanqueray,  15  C.  B.  130,  the  representa- 
tion or  statement  of  the  soundness  of  a  horse,  that  was  to  be 
sold  at  auction,  was  made  by  the  owner  the  day  before,  but 
not  as  a  part  of,  and  collateral  to,  the  sale,  and  was  therefore 
held  to  be  no  warranty.  Such  statement  or  representation 
may  have  been  an  inducement  to  the  sale,  and  so  might  be 
made  the  basis  of  an  action  in  tort  for  misrepresentation,  but 
not  being  part  of,  and  collateral  to,  the  sale,  it  was  held  that 
it  could  not  be  made  the  basis  of  an  action  in  contract  for 
breach  of  warranty,  Crowder,  J.,  saying,  "  The  conversation 
which  took  place  between  the  parties  on  the  Sunday  [the  day 
before  the  sale]  was  a  mere  representation,  and  was  evidently 
not  made  with  an  intention  to  warrant  the  horse.  A  repre- 
sentation  to  constitute  a  warranty,  must  be  shown  to  have 
"been  intended  to  form  part  of  the  contract.  I  think  it  abun- 
dantly clear  upon  the  evidence  that  the  matter  here  relied  on 
was  not  understood  or  intended  as  forming  part  of  the  con- 
tract which  might  be  made  at  the  auction  on  the  following 
day,  which  it  was  well  known  to  both  parties  would  be  with- 
out warranty.  It  was  a  mere  representation,  quite  distinct 
from  any  intention  to  warrant  the  animal."  As  it  appears 
from  the  statement  of  facts  in  the  opinion  of  Jervis,  C.  J.,  in 
that  case,  that  when  the  horse  was  put  up  at  auction,  it  was1 
announced  that  it  would  be  sold  without  a  warranty,  this 
may  be  said  to  have  been  an  express  exclusion,  but,  after  all, 
the  fact  remains  that  there  was  a  representation  and  a  repre- 
sentation that  undoubtedly  induced  the  purchaser  to  buy,  but 
that  representation,  whether  expressly  excluded  or  not,  was 
not  made  part  of,  and  collateral  to,  the  sale  that  took  place. 
In  the  substantially  similar  case  of  Grossman  v.  Johnson,  63 
Vt.  333,  however,  the  distinction  between  representation  as 
an  inducement  to,  and  representation  as  part  of,  and  collat- 
eral to,  the  sale  transaction,  was  seemingly  not  observed. 


84  SUMMARY  OF  SALES. 

Classification  of  warranties.  —  "  Warranties  are  usually 
classified  as  express  or  implied;  the  former  being  those  which 
the  seller  makes  in  terms,  while  the  latter  are  those  which  the 
law  implies  from  the  nature  or  circumstances  of  the  case. 
The  most  important  of  those  which  are  said  to  be  implied  by 
law  are  warranties  of  title,  quality,  fitness,  and  genuine- 
ness." (Mechem  on  Sales,  §  1233.) 

Professor  Burdick  (Sales  [2d  ed.],  133)  says,  "All  of 
the  seller's  engagements,  which  were  formerly  [that  is  prior 
to  the  Sale  of  Goods  Act]  called  implied  warranties  in  Eng- 
land, and  which  are  still  called  by  that  name  in  this  country 
[see  §§  13-16  of  the  Uniform  Sales  Act],  have  been  con- 
sidered under  the  head  of  conditions."  (See  Burdick  on 
Sales  [2d  ed.],  92-124.)  In  this  respect,  however,  he  follows 
the  English  Sale  of  Goods  Act  (§  12  [2]  and  [3]),  in  which 
the  only  implied  warranties  seem  to  be  those  for  quiet  posses- 
sion and  freedom  from  encumbrance.  That  act,  however,  is 
not  the  law  of  this  country,  and  although  its  codification  of 
the  subject  of  conditions  and  warranties  is  highly  commend- 
able, we  shall  follow  the  classification  generally  adopted  by 
the  courts  of  this  country. 

Express    warranty  :     defined.  —  "An    express 


.,  is  a  direct  and  positive  affirmation  or  assertion  m 
by  the  seller,  as  part  of  the  contract  of  sale,  relating  to  some 
matter  of  fact  respecting  the  title,  quality,  character  or  con- 
dition of  the  thing  sold?  under  such  circumstances  that  it 
may  fairly  be  regarded  by  the  buyer  as  a  promise  or  under- 
taking on  the  part  of  the  seller  that  the  fact  is  as  he  so  affirms 
^or_asserts,  and  which  the  buyer  relies  upon  as  such  in  making 
the  purchase."  (Mechem  on  Sales,  §  1234.)  This  statement 
expresses  the  generally  accepted  law,  with  opportunity  for 
recognition  of  distinction  between  mere  representation  and 
warranty,  as  a  question  of  fact.  Express  warranty  is  defined 
in  the  Uniform  Sales  Act  (§  12)  in  broader  terms,  recog- 
nizing apparently  no  distinction  between  mere  representation 
and  warranty. 


WARRANTY.  85 

Word  "  warrant  "  unnecessary. — "  It  is  not  necessary  that 
in  the  collateral  agreement  the  word  warranty  should  be 
used.  No  particular  phraseology  is  requisite  to  constitute  a 

warranty.      'It  must  be  a  representation  which  the  vendee 


relies  onTand  which  is  understood  by  the  parties  as  an  absolute 

9neida 
(Fair- 


assertion,  and  not  the  expression  of  an  opinion.'     (Oneida 
Manufacturing  Society  v.  Lawrence,  4  Cow.  440.)"     (. 


bank  Canning  Co.  v.  Metzger,  118  1ST.  Y.  260,  265.) 

"  In  every  action  on  a  warranty,  it  must  be  shown  that 
there  was  an  express  and  direct  affirmation  of  the  quality  and 
condition  of  the  thing  sold,  as  contradistinguished  from 
opinion,  etc.,  and  when  that  is  made  out,  it  would  be  an 
anomaly  to  require  that  the  word  warrant  should  be  used. 
Any  words  of  equivalent  import,  showing  the  intention  of  the 
parties,  that  there  should  be  a  warranty,  will  suffice."  (Chap- 
man v.  Murch,  19  Johns.  290,  291.) 

Intention  of  seller  to  warrant. —  In  Pasley  v.  Freeman, 
3  T.  R.  51,  a  leading  English  case  on  deceit,  not  warranty, 
Buller,  J.,  says:  "It  was  rightly  held  by  Holt,  C.  J., 
.  .  .,  and  has  been  uniformly  adopted  ever  since  that  an 
affirmation  at  the  time  of  a  sale  is  a  warranty  provided  it 
appears  on  evidence  to  have  been  so  intended."  This,  coupled 
with  a  desire  for  consistency  with  the  doctrine  of  caveat 
emptor,  may  have  led  Chief  Justice  Gibson  of  Pennsylvania, 
in  BorreJcins  v.  Bevan,  3  Rawle,  23,  42,  to  regret  that  the 
rule  of  Chandelor  v.  Lopus,  Cro.  Jac.  4,  "  has  been  swept 
away  by  a  flood  of  innovation  in  England  and  some  of  our 
sister  States,"  and  to  say  in  McFarland  v.  Newman,  9  Watts, 
f>5,  (>0,  "  Though,  to  constitute  a  warranty  requires  no  partic- 
ular  form  of  words,  the  naked  averment  of  a  fact  is  neither 
a  warranty  of  itself  nor  evidence  of  it.  In  connection  with 
other  circumstances,  it  certainly  may  be  taken  into  considera- 
tion ;  but  the  jury  must  be  satisfied,  from  the  whole,  that  the 
vendor  actually,  and  not  constructively,  consented  to  be 
bound  for  the  truth  of  his  representation."  This  still  seems 


86  SUMMARY  OF  SALES. 

to  be  the  law  of  Pennsylvania.  (Hexter  v.  Bast,  125  Pa.  St. 
52;  Holmes  v.  Tyson,  147  Pa.  St.  305.) 

In  Chandelor  v.  Lopus,  Cro.  Jac.  4,  "  the  doctrine  laid 
down  is  that  a  mere  affirmation  or  representation  as  to  the 
character  or  quality  of  goods  sold  will  not  constitute  a  war- 
ranty; and  that  doctrine  has  long  since  been  exploded,  and 
the  case  itself  is  no  longer  regarded  as  good  law  in  this 
country  or  England."  (Hawkins  v.  Pemberton,  51  N.  Y. 
198,  203.)  In  a  recent  English  case,  the  law  is  thus  stated: 
"  In  determining  whether  it  was  so  intended,  a  decisive  test 
is  whether  the  vendor  assumes  to  assert  a  fact  of  which  the 
buyer  is  ignorant  or  merely  states  an  opinion  or  judgment 
upon  a  matter  of  which  the  vendor  has  no  special  knowledge, 
and  on  which  the  buyer  may  be  expected  also  to  have  an 
opinion  and  to  exercise  his  judgment.  In  the  former  case 
it  is  a  warranty,  in  the  latter  not."  (De  Lassalle  v.  Guild- 
ford,  [1901]  2  K.  B.  215,.  221.) 

"  Many  American  authorities,  especially  the  older  ones, 
require  an  intention  to  warrant  on  the  part  of  the  seller. 
By  this  requirement,  however,  is  generally  meant  not  what 
Chief  Justice  Gibson  required,  an  intent  to  contract  or  to 
agree  to  be  bound,  but  rather,  as  in  England,  an  intent  to 
make  a  statement  as  matter  of  fact  rather  than  as  matter  of 
opinion."  (Williston  on  Sales,  §  200.) 

In  Vermont,  "  to  constitute  a  representation  a  warranty, 
it  must  have  been  so  intended  and  understood  by  the  parties, 
both  vendor  and  vendee ;  .  .  . ;  or,  intended  by  the  par- 
ties as  a  part  of  the  contract ;  .  .  . ;  or,  have  formed  the 
basis  of  the  contract."  (Enger  v.  Dawley,  62  Vt.  164,  165.) 
But  this  was  modified  by  the  court,  in  Hobart  v.  Young,  63 
Vt.  363,  369,  saying:  "Any  affirmation  as  to  the  kind  or 
quality  of  the  thing  sold,  not  uttered  as  matter  of  commen- 
dation, opinion,  nor  belief,  made  by  the  seller  pending  the 
treaty  of  sale,  for  the  purpose  of  assuring  the  purchaser  of 
the  truth  of  the  affirmation  and  of  inducing  him  to  make  the 
purchase,  if  so  received  and  relied  upon  by  the  purchaser,  is 
deemed  to  be  an  express  warranty.  And  in  case  of  oral 


WAEEANTY.  87 

contracts,  it  is  the  province  of  the  jury  to  decide,  in  view 
of  all  the  circumstances  attending  the  transaction,  whether 
such  a  warranty  exists  or  not." 

According  to  the  clear  weight  of  authority,  the  following 
statement  by  Earl,  J.,  in  Hawkins  v.  Pemberton,  51  N.  Y. 
198,  202,  may  be  accepted  as  the  generally  prevailing  law:  J 
"  It  is  not  true,  as  sometimes  stated,  that  the  representation,  Jr*7 
in  order  to  constitute  a  warranty,  must  have  been  intended  by 
the  vendor,  as  well  as  understood  by  the  vendee,  as  a  war- 
ranty. If  the  contract  be  in  writing  and  it  contains  a  clear 
warranty,  the  vendor  will  not  be  permitted  to  say  that  he 
did  not  intend  what  his  language  clearly  and  explicitly 
declares;  and  so  if  it  be  by  parol,  and  the  representation  as 
to  the  character  or  quality  of  the  article  sold  be  positive,  not 
mere  matter  of  opinion  or  judgment,  and  the  vendee  under- 
stands it  as  a  warranty,  and  he  relies  upon  it  and  is  induced 
by  it,  the  vendor  is  bound  by  the  warranty,  no  matter  whether 
he  intended  it  to  be  a  warranty  or  not.  He  is  responsible  for 
the  language  he  uses,  and  cannot  escape  liability  by  claiming 
Jthat  he  did  not  intend  to  convey  the  impression  which  his 
language  was  calculated  to  produce  upon  the  mind  of  the 
vendee."  That  is,  "  the  courts  have  in  their  later  decisions 
manifested  a  strong  disposition  to  construe  liberally  in  favor 
of  the  vendee  the  language  used  by  the  vendor  in  making  any 
affirmation  as  to  his  goods,  and  have  been  disposed  to  treat 
such  affirmations  as  warranties  whenever  the  language  would 
reasonably  authorize  the  inference  that  the  vendee  so  under- 
stood it."  (Stone  v.  Denny,  4  Met.  151,  155.) 

Warranty  against  obvious  defects. — "  In  the  nature  of 
things  one  cannot  rely  upon  the  truth  of  that  which  he  knows 
to  be  untrue ;  and  to  a  purchaser  fully  knowing  the  facts  in 
respect  to  the  property,  misrepresentation  cannot  have  been 
an  inducement  or  consideration  to  the  making  of  the  pur- 
chase, and  hence  could  have  been  no  part  of  the  contract. 

"  It  has  often  been  said  that  a  general  warranty  may  cover 
patent  defects,  and  it  has  led  to  some  misapprehension  of  the 


88  SUMMARY  OF  SALES. 

law.  The  proposition  is  strictly  true,  but,  as  was  said  by 
the  court  in  Marshall  v.  Drawhorn,  27  Ga.  275,  it  is  '  con- 
fined to  those  cases  of  doubt  and  difficulty  where  the  pur- 
chaser relies  on  his  warranty,  and  not  on  his  own  judgment.' 
It  has  no  application  to  the  case  of  a  purchaser  who  knows  the 
defects  in  the  property  and  the  untruthfulness  of  the  vendor's 
representations.  We  do  not,  however,  mean  to  say  there  may 
not  be  a  warranty  against  the  future  consequences  or  results 
from  even  known  defects."  (McCormick  v.  Kelly ,  28  Minn. 
135,  138.) 

Warranty :  consideration  for. —  In  Cave  v.  Coleman,  3 
M.  &  R.  2,  "  it  was  held  that  a  verbal  representation  by  the 
seller  to  the  buyer,  in  the  course  of  dealing,  that  he  '  may 
depend  upon  it  the  horse  is  perfectly  quiet  and  free  from 
vice,'  is  a  warranty.  Nor  is  it  necessary  that  the  statement 
or  representation  should  be  simultaneous  with  the  close  of 
the  bargain:  if  it  be  part  of  the  contract,  it  matters  not  at 
what  part  of  the  negotiation  it  is  made."  (Jervis,  C.  J.,  in 
Hopkins  v.  Tanqueray,  15  C.  B.  130.)  The  consideration 
that  supports  the  sale,  in  such  case,  supports  the  warranty. 

But  a  warranty  made  after  the  sale  is  complete,  in  order 
to  be  effective,  must  be  supported  by  a  new  consideration. 
(Roscorla  v.  Thomas,  3  Q.  B.  234;  Hogins  v.  Plympton,  11 
Pick.  97;  Summers  v.  Vaughan,  35  Ind.  323;  Cady  v. 
Walker,  62  Mich.  157;  Morehouse  v.  Comstock,  42  Wis. 
626.)  "  The  warranty  in  such  case  is  a  supplemental  con- 
tract." (Chalmers'  Sale  of  Goods  [7th  ed.],  34) 

Written  contract  excludes  oral  warranty. —  "  Undoubtedly 
the  existence  of  a  separate  oral  agreement  as  to  any  matter 
on  which  a  written  contract  is  silent,  and  which  is  hot  in- 
consistent with  its  terms,  may  be  proven  by  parol,  if  under 
the  circumstances  of  the  particular  case  it  may  properly 
be  inferred  that  the  parties  did  not  intend  the  written  paper 
to  be  a  complete  and  final  statement  of  the  whole  of  the 
transaction  between  them.  But  such  an  agreement  must 


WABRANTY.  89 

not  only  be  collateral,  but  must  relate  to  a  subject  distinct 
from  that  to  which  the  written  contract  applies;  that  is,  it 
must  not  be  so  closely  connected  with  the  principal  trans- 
action as  to  form  part  and  parcel  of  it.  And  when  the  writ- 
ing  itself  upon  its  face  is  couched  in  such  terms  as  import 
a  complete  legal  obligation  without  any  uncertainty  as  to 
the  object  or  extent  of  the  engagement,  it  is  conclusively 
presumed  that  the  whole  engagement  of  the  parties,  and  the 
extent  and  manner  of  their  undertaking,  were  reduced  to 
writing."  (Greenleaf  on  Evidence,  §  275.)  To  the  same 
effect  see  Seitz  v.  Brewers'  Refrig.  Co.,  141  U.  S.  510; 
Eighmie  v.  Taylor,  98  1ST.  Y.  288 ;  Schramm  v.  Boston  Sugar 
Ref.  Co.,  146  Mass.  211;  Galpin  v.  Atwater,  29  Conn.  93; 
Naumberg  v.  Young,  44  N.  J.  Law,  331. 

"  Where  the  writing  does  not  purport  to  disclose  the  con- 
tract, or  cover  it;  where,  in  view  of  its  language  read  in 
connection  with  the  attendant  facts  it  seems  not  designed 
as  a  written  statement  of  an  agreement,  but  merely  as  an 
execution  of  some  part  or  detail  of  an  unexpressed  contract ; 
where  it  purports  only  to  state  one  side  of  an  agreement 
merely  and  is  the  act  of  one  of  the  parties  only,  in  the  per- 
formance of  his  promise;  in  these  and  the  like  cases  the 
exception  may  properly  apply,  and  the  oral  agreement  be 
shown."  (Eighmie  v.  Taylor,  98  N.  Y.  288,  296.) 

If  the  sale  or  contract  to  sell  be  within  the  Statute  of 
Frauds,  and  if  a  note  or  memorandum  be  relied  on  as  evi- 
dence of  compliance  therewith,  such  note  or  memorandum 
must  also  contain  the  express  warranty,  if  there  is  one, 
otherwise  evidence  of  such  warranty  will  not  be  received. 
(Peltier  v.  Collins,  3  Wend.  459.)  If,  however,  acceptance 
and  receipt,  or  part  payment  be  relied  on  as  evidence  of 
compliance  with  the  statute,  oral  evidence  of  an  express 
warranty  is  then  admissible.  The  above,  of  course,  does 
not  apply  to  implied  warranties,  so-called  implications  of 
law. 

Written  contract  does  not  exclude  implied  warranty. — 
"  The  obligation  attached  to  an  executory  contract  for  the 


90  SUMMARY  OF  SALES. 

sale  of  goods  by  the  manufacturer  or  maker,  cannot  be 
changed  by  the  mere  fact  that  the  contract  has  been  reduced 
to  writing.  The  writing,  it  is  true,  is  deemed  to  express  the 
whole  agreement  of  the  parties,  but  since  this  peculiar  lia- 
bility arises  from  the  nature  of  the  transaction  and  the 
relations  of  the  parties,  without  express  words  or  even  actual 
intention,  it  will  remain  as  part  of  the  seller's  obligation 
unless  in  some  way  expressly  excluded.  All  implied  war- 
ranties, therefore,  from  their  nature,  may  attach  to  a  written, 
as  well  as  an  unwritten  contract  of  sale.  The  parties  may, 
of  course,  so  contract  with  each  other  as  to  eliminate  this 
obligation  from  the  transaction  entirely.  The  seller  may 
.by  express  and  unequivocal  words  exclude  it  and,  in  like 
manner,  the  buyer  may  waive  it.  So,  also,  thej^arties^ma^ 
provide  for  a  delivery  or  inspection  of  Ine  article  when 
made,  which  will  operate  to  extinguish  the  liability  upon 
acceptance."  (Carleton  v.  Lombard,  Ayres  &  Co.,  149  !N". 
Y.  137,  146.) 

Express  warranty  excluding  implied  warranty. — "  There 
are  numerous  well-considered  cases  that  an  express  warranty 
of  quality  excludes  any  implied  warranty  that  the  articles 
sold  were  merchantable  or  fit  for  their  intended  use.  (Inter- 
national Pavement  Co.  v.  Smith,  17  Missouri  App.  264; 
Johnson  v.  Latimer,  71  Georgia,  470;  Cosgrove  v.  Bennett, 
32  Minnesota,  371;  Shepherd  v.  Gilroy,  46  Iowa,  193; 
McGraw  v.  Fletcher,  35  Michigan,  104.) 

"  Nor  is  there  any  conflict  between  these  authorities  and 
others  like  them  on  the  one  hand,  and  those  on  the  other, 
which  hold  that  goods  sold  by  a  manufacturer,  in  the  absence 
of  an  express  contract,  are  impliedly  warranted  as  merchant- 
able, or  as  suited  to  the  known  purpose  of  the  buyer. 
(Dushane  v.  Benedict,  120  U.  S.  630,  636,  and  cases  there 
cited.)  It  is  the  existence  of  the  express  warranty,  or  its 
absence,  which  determines  the  question."  (De  Witt  v.  Berry, 
134  U.  S.  306,  313.) 


WARRANTY.  91 

"  It  is  true  that,  as  a  general  rule,  no  warranty  will  be 
implied  where  the  parties  have  expressed  in  words  the  war- 
ranty by  which  they  mean  to  be  bound  (2  Benj.,  Sales,  sec. 
1002)  ;  but  the  rule  does  not  extend  to  the  exclusion  of  war- 
ranties implied  by  law,  where  they  are  not  excluded  by 
the  terms  of  the  contract.  Thus,  an  express  warranty  of 
title  does  not  exclude  an  implied  warranty  of  quality." 
(Blackmore  v.  Fairbanks,  Morse  &  Co.,  79  la.  282,  289.) 
And,  conversely,  an  express  warranty  of  quality  does  not 
exclude  an  implied  warranty  of  title. 

"  The  rule  deducible  from  the  authorities  is  that  an  im- 
plied and  an  express  warranty  may  exist  under  the  same 
contract,  as  when  the  expressed  does  not  relate  to  the  obliga- 
tions created  by  the  implied;  but  when  the  expressed  war- 
ranty does  provide  as  to  the  same  obligation,  it  excludes  the 
implied.  In  other  words,  the  law  will  not  imply  anything 
as  to  matters  about  which  the  parties  have  expressly  agreed." 
(Bucy  v.  Pitts  Agricultural  Works,  89  la.  464,  466.) 

Implied  warranty :  defined. — "  Express  warranties  have 
been  seen  to  be  those  which  arise  from  the  direct  and  posi- 
tive statements  of  the  parties.  They  may  be  said,  therefore, 
to  be  created  by  the  act  of  the  parties.  Implied  warranties, 
on  the  other  hand,  are  such  as  arise  by  operation  of  law, 
and  an  implied  warranty  may  be  defined  as  a  contract  or 
agreement  which  the  law  imputes  to  the  seller  by  reason  of 
the  nature,  circumstances  or  subject-matter  of  the  contract 
of  sale."  (Mechem  on  Sales,  §  1295.) 

Implied  warranties :  early  English  law. — "  The  result  of 
the  older  authorities  is,  that  there  is  by  the  law  of  England  no 
warranty  of  title  in  the  actual  contract  of  sale,  any  more 
than  there  is  of  quality.  The  rule  of  caveat  emptor  applies 
to  both;  but  if  the  vendor  knew  that  he  had  no  title,  and 
concealed  that  fact,  he  was  always  held  responsible  to  the 
purchaser  as  for  a  fraud,  in  the  same  way  that  he  is  if  he 
knew  of  the  defective  quality.  This  rule  will  be  found  in 


92  SUMMARY  OF  SALES. 

Co.  Litt.  102  a;  3  Hep.  22  a;  Noy,  Max.  42 ;  Fitz.  Nat.  Brev. 
94,  c,  in  Springwell  v.  Allen,  Aleyn,  91,  cited  by  Littledale, 
J.,  in  Early  v.  Garreit,  9  B.  &  C.  932,  and  in  Williamson 
v.  Allison,  2  East,  449.  .  .  . 

"  It  may  be,  that  as  in  the  earlier  times  the  chief  trans- 
actions of  purchase  and  sale  were  in  markets  and  fairs,  where 
the  bona  fide  purchaser  without  notice  obtained  a  good  title 
as  against  all  except  the  Crown  (and  afterwards  a  prose- 
cutor, to  whom  restitution  is  ordered  by  the  21  Hen.  8,  c.  11), 
the  common  law  did  not  annex  a  warranty  to  any  contract  of 
sale.  Be  that  as  it  may,  the  older  authorities  are  strong  to 
show  that  there  is  no  such  warranty  implied  by  law  from  the 
mere  sale.  In  recent  times  a  different  notion  appears  to  have 
been  gaining  ground  (see  note  of  the  learned  editor  to  3 
Rep.  22  a) ;  and  Mr.  Justice  Blackstone  says,  '  In  contracts 
for  sale  it  is  constantly  understood  that  the  seller  undertakes 
that  the  commodity  he  sells  is  his  own ;'  and  Mr.  Woddeson, 
in  his  Lectures,  vol.  2,  p.  415,  goes  so  far  as  to  assert  that 
the  rule  of  caveat  emptor  is  exploded  altogether,  which  no 
authority  warrants."  (Parke,  B.,  in  Morley  v.  Atten- 
borough,  3  Ex.  500.) 

Since  the  decision  of  Parkinson  v.  Lee,  2  East,  315,  in 
1802,  "  the  common  law  judges  at  Westminster-hall  have 
manifested  a  strong  disposition  to  borrow  from  the  civil 
law  its  doctrine  in  relation  to  sales  of  chattels.  Departing 
from  the  stern  policy  of  their  predecessors  in  resisting  the 
encroachments  of  the  civil  law,  and  impelled  by  a  new  zeal 
for  that  system  of  jurisprudence,  they  have,  step  by  step, 
introduced  into  the  English  system  of  the  common  law 
various  modifications  of  the  civil  law  doctrine  of  implied 
warranties  on  sales  of  chattels.  Thus  we  find  that  in  Hibbert 
v.  Shee,  1  Camp.  N.  P.  R.  113,  year  1807,  and  in  Gardner 
v.  Gray,  4  Camp.  R.  144,  year  1815,  Lord  Ellenborough  rec- 
ognized the  principle  that  a  sale  by  sample  implied  a  war- 
ranty that  the  bulk  of  the  goods  corresponded  in  quality 
with  the  sample.  See  Lorymer  v.  Smith,  1  Barn.  &  Cres. 
1,  year  1822 ;  Parker  v.  Palmer,  4  Barn.  &  Aid.  337,  year 


WARRANTY.  93 

1821.)  And  in  Jones  v.  Bowden,  4  Taun.  847,  852,  year 
1813,  the  English  common  pleas  decided  that  a  warranty  of 
soundness  was  implied  from  the  usage  of  trade.  And  in 
Laing  v.  Fidgeon,  6  Taun.  108,  year  1815,  the  same  court 
held,  that  in  all  contracts  for  the  sale  of  manufactured  goods 
by  the  manufacturer,  a  warranty  was  implied  that  the  goods 
were  merchantable.  (S.  C.  4  Camp.  169.)  And  in  a  great 
number  of  subsequent  cases,  the  English  common  law  courts 
advanced  still  further  in  their  departure  from  the  common 
law,  and  held,  that  in  every  sale,  without  any  express  war- 
ranty, there  was  an  implied  warranty  that  the  goods  were 
merchantable,  and  if  sold  for  a  particular  purpose,  that  they 
were  reasonably  fit  and  proper  for  such  purpose."  (Paige, 
J.,  in  Hargous  v.  Stone,  5  N.  Y.  73,  83.) 

"  On  the  question  whether  the  common  law  will  imply  a 
warranty,  as  distinguished  from  a  condition,  no  authority  has 
been  found.  If  the  reason  judicially  given  for  the  implica- 
tion of  conditions  is  to  be  regarded  as  the  essential  basis  for 
making  any  implication  of  law,  viz.,  that  the  implication  is 
made  '  with  the  object  of  giving  efficacy  to  the  transaction  and 
preventing  such  a  failure  of  consideration  as  cannot  have 
been  within  the  contemplation  of  either  side  '  ( The  Moorcock, 
L.  R.  14  P.  D.  64,  68),  then  it  would  seem  that  the  common 
law  will  not  imply  a  warranty,  for  ex  hypothesi  a  breach 
would  not  cause  a  failure  of  consideration.  And  such  is 
conceived  to  be  the  common  law  rule."  (Benjamin  on  Sales 
[5th  Eng.  ed.],  672.) 

Implied  warranties:  classification. — According  to  the 
common  law,  "  implied  warranties  fall  chiefly  under  one  of 
two  general  heads:  1.  Implied  warranties  of  title;  and  2. 
Implied  warranties  of  quality;  under  the  latter  head  being 
embraced  such  specific  subjects  as  the  implied  warranty  of 
conformity  to  sample,  genuineness,  identity,  merchanta- 
bility, and  fitness  for  intended  use."  (Mechem  on  Sales, 
§  1299.) 

See  sections  13-16  of  the  Uniform  Sales  Act. 


94  SUMMARY  OF  SALES. 

Implied  warranty  of  title. —  In  1849,  Parke,  B.,  in  Morley 
v.  Attenborough,  3  Ex.  500,  said:  "  The  result  of  the  older 
authorities  is,  that  there  is  by  the  law  of  England  no  war- 
ranty of  title  in  the  actual  contract  of  sale,  any  more  than 
there  is  of  quality.  The  rule  of  caveat  emptor  applies  to 
both;  but  if  the  vendor  knew  that  he  had  no  title,  and  con- 
cealed that  fact,  he  was  always  held  responsible  to  the  pur- 
chaser as  for  a  fraud,  in  the  same  way  that  he  is  if  he  knew 
of  the  defective  quality."  But,  in  1864,  when  it  was  con- 
tended in  Eichholz  v.  Bannister,  17  C.  B.  (N.  S.)  708, 
"  that  it  is  part  of  the  common  law  of  England  that  the 
vendor  of  goods  by  the  mere  contract  of  sale  does  not  war- 
rant his  title  to  the  goods  he  sells,  that  the  buyer  takes  them 
at  his  peril,  and  that  the  rule  caveat  emptor  applies."  Erie, 
C.  J.,  said :  "  I  consider  it  to  be  clear  upon  the  ancient 
authorities,  that,  if  the  vendor  of  a  chattel  by  word  or  con- 
duct gives  the  purchaser  to  understand  that  he  is  the  owner, 
that  tacit  representation  forms  part  of  the  contract,  and  that, 
if  he  is  not  the  owner,  his  contract  is  broken.  ...  I 
think  justice  and  sound  sense  require  us  to  limit  the  doctrine 
so  often  repeated,  that  there  is  no  implied  warranty  of  title 
on  the  sale  of  a  chattel.  I  cannot  but  take  notice,  that, 
after  all  the  research  of  two  very  learned  counsel,  the  only 
semblance  of  authority  for  this  doctrine  from  the  time  of 
Noy  and  Lord  Coke  consists  of  mere  dicta.  These  dicta, 
it  is  true,  appear  to  have  been  adopted  by  several  learned 
judges,  amongst  others  by  my  excellent  Brother  Williams, 
whose  words  are  almost  obligatory  on  me :  but  I  cannot  find 
a  single  instance  in  which  it  has  been  more  than  a  repetition 
of  barren  sounds,  never  resulting  in  the  fruit  of  a  judgment. 
This  very  much  tends  to  show  the  wisdom  of  Lord  Camp- 
bell's remark  in  Sims  v.  Marryat,  17  Q.  B.  291  (E.  C.  L.  K., 
vol.  79),  that  the  rule  [caveat  emptor~\  is  beset  with  so 
many  exceptions  that  they  well-nigh  eat  it  up." 

"  Some  slight  doubt  has  been  supposed  to  be  thrown  upon 
this  doctrine,  in  England,  by  the  remarks  of  Parke,  B., 
in  the  case  of  Morley  v.  Attenborough,  3  Exch.  500.  It  is, 


WARRANTY.  95 

however,  too  well  settled,  both  in  England  and  in  this  country, 
to  be  overthrown  or  shaken  by  the  obiter  dicta  of  a  single 
judge.  .  .  .  The  case  of  Morley  v.  Attenborough  .  .  . 
arose  upon  a  sale,  by  a  pawnbroker,  of  a  harp  pledged 
with  him  as  security  for  a  debt.  The  sale  was  made  through 
auctioneers,  and  a  general  catalogue  was  furnished  to  the 
bidders,  which  '  stated  on  the  title  page  that  the  goods  for  sale 
consisted  of  a  collection  of  forfeited  property/  The  court 
held,  that  there  was  no  implied  warranty  of  title  in  that  case. 
There  was,  perhaps,  good  reason  why  this  case  should  be 
considered  an  exception  to  the  general  rule.  The  pawn- 
broker could  not  justly  be  presumed  to  have  any  special 
knowledge  in  regard  to  the  ownership  of  the  articles  pledged. 
The  probability  was,  that  he  had  received  them  upon  the 
faith  of  the  pledger's  possession  alone,  and  the  purchaser 
was,  in  this  respect,  upon  an  equal  footing  with  himself. 

"  There  are  other  exceptions  to  the  general  rule,  which 
have  the  same  tendency.  The  case  of  judicial  sales  is  one. 
There  is  no  ground  for  presuming  that  the  officer  of  the  law 
has  any  peculiar  knowledge  on  the  subject  of  the  title  to  the 
property  he  exposes  to  sale.  No  doubt  both  the  pawnbroker 
and  the  officer,  if  shown  to  have  knowledge  which  they  con- 
ceal, would  be  liable  for  fraud;  or,  if  they  could  justly  be 
presumed  to  have  such  knowledge,  would  be  liable  upon  an 
implied  warranty."  (Selden,  J.,  in  Hoe  v.  Sanborn,  21  !N"; 
Y.  552,  556.) 

Implied  warranty  of  title:  seller  in,  or  not  in  possession. 
— "  Lord  Holt,  in  Medina  v.  Stoughton,  1  Salk.  210 ;  Ld. 
Raym.  593,  says,  that  *  Where  one  in  possession  of  a  personal 
chattel  sells  it,  the  bare  affirming  it  to  be  his  own  amounts  to 
a  warranty ;'  and  Mr.  Justice  Buller,  in  Pasley  v.  Freeman, 
3  T.  R.  57,  disclaims  any  distinction  between  the  effect  of 
an  affirmation,  when  the  vendor  is  in  possession  or  not, 
treating  it  as  equivalent  to  a  warranty  in  both  cases."  (Parke, 
B.,  in  Morley  v.  Attenborough,  3  Ex.  500.)  "  The  progress 
of  the  law  from  this  point,"  says  Professor  Williston  (Sales, 


96  SlJMMABY    OF    SALES. 

§  217),  "is  typical  of  its  tendency  in  the  entire  subject  of 
contracts.  In  early  times  intentions  not  expressed  by  words 
were  disregarded;  to-day  they  are  frequently  given  effect 
by  the  recognition  of  implied  meanings." 

"  This  distinction  has,  however,  been  much  urged  in  the 
United  States.  It  seems  universally  to  be  conceded  here 
that  where  the  seller  is  in  possession  of  the  goods  a  warranty 
of  title  accompanies  the  sale,  upon  the  ground  that  his  under- 
taking to  sell  under  such  circumstances  is  of  itself  an  affir- 
mation of  his  title.  But  where  he  is  not  in  possession  there 
are  a  few  cases  and  numerous  dicta  asserting  that  no  such 
warranty  arises;  and  this  distinction  has  been  said  to  be  so 
deeply  rooted  in  our  jurisprudence  that  even  if  erroneous  it 
could  not  easily  be  eradicated.  The  cases,  however,  which 
can  be  regarded  as  direct  authority  for  the  distinction  are 
exceedingly  few,  and  the  tendency  to  break  away  from  it 
is  so  strong  that  it  is  conceived  that  it  can  safely  be  asserted 
that  the  modern  rule  in  the  United  States  practically  repu- 
diates the  distinction  and  places  itself  in  accord  with  the  later 
English  rule  as  stated  by  Mr.  Benjamin,  namely,  that  where 
the  seller,  whether  in  or  out  of  possession,  purports  to  sell 
an  absolute  title,  the  warranty  of  title  will  attach."  (Mechem 
on  Sales,  §  1302.)  Or,  as  said  by  Morton,  J.,  in  Sliattuck 
v.  Green,  104  Mass.  42,  45,  "  It  is  a  general  rule  of  law 
in  this  country  that  in  a  sale  of  chattels  a  warranty  is  im- 
plied unless  the  circumstances  are  such  as  to  give  rise  to  a 
contrary  presumption.  (1  Smith,  Lead.  Cas.,  6th  Am.  ed., 
242;  1  Parsons  on  Contracts,  5th  ed.,  576,  and  cases  cited.) 
If  the  vendor  has  either  actual  or  constructive  possession 
and  sells  the  chattels,  and  not  merely  his  interest  in  them, 
such  a  sale  is  equivalent  to  an  affirmation  of  title,  and  a 
warranty  is  implied." 

See,  also,  section  13  of  the  Uniform  Sales  Act. 

Implied  warranty  of  title  is  implied  condition  under  Sale 
of  Goods  Act. —  Recognizing  the  transfer  of  title  as  one  of 
the  fundamental  engagements  of  the  seller,  and  BO  a  con- 


WAEKANTY.  97 

dition,  Professor  Bin-dick  (Sales  [2d  ed.],  92-94)  says: 
"  Persons  who  enter  into  an  agreement  for  the  sale  and 
purchase  of  a  horse  intend  to  effect  a  transfer  of  the  general 
property  in  that  horse,  not  to  sell  and  buy  a  lawsuit.  Hence, 
'  unless  the  circumstances  of  the  contract  are  such  as  to 
show  a  different  intention,  there  is  an  implied  condition 
on  the  part  of  the  seller  that  in  the  case  of  a  sale  he  has 
a  right  to  sell  the  goods,  and  that  in  the  case  of  an  agree- 
ment to  sell,  he  will  have  the  right  to  sell  the  goods  at  the 
time  when  the  property  is  to  pass.'  (Sale  of  Goods  Act, 

§  12  (1).) 

"  Before  the  enactment  of  this  statute  the  English  cases 
called  such  engagement  a  warranty;  and  that  term,  rather 
than  condition,  is  employed  by  American  judges  and  writers. 
In  both  countries,  however,  there  is  ample  authority  for 
the  view  that  this  undertaking  is  an  essential  element  of  the 
sale  contract,  a  breach  of  which  entitles  the  purchaser  to 
treat  the  contract  as  repudiated.  . 

"  In  some  jurisdictions,  however,  this  engagement  of  the 
seller  is  treated  as  a  warranty  in  its  narrow  sense.  It  is 
deemed  collateral  to  the  sale  contract,  not  one  of  its  essential 
terms." 

We  feel  constrained,  however,  to  follow  the  nomenclature, 
at  least,  generally  prevailing  in  this  country,  notwithstanding 
some  authorities  here  and  the  English  act  properly  treat 
this  undertaking  of  the  seller  as  an  essential  term  of,  and 
not  as  collateral  to,  the  sale  transaction. 

Implied  warranty  of  quality :  early  law. —  "  Caveat  smptor 
is  an  ancient  rule  of  the  common  law,  and  stands  in  con- 
tradistinction to  the  rule  of  caveat  venditor  of  the  civil  law 
An  implied  warranty  of  title  on  a  sale  of  chattels  is  common 
to  both  the  common  and  civil  law.  ["  By  the  classical 
Roman  Law,"  says  Professor  Williston,  Sales,  §  222,  "  the 
seller  was  not  bound  to  transfer  a  good  title  to  the  buyer. 
He  was,  however,  bound  to  guarantee  the  purchaser  undis- 
turbed possession."]  But  in  regard  to  the  responsibility  of 
7 


98  SUMMARY  OF  SALES. 

the  seller  to  answer  for  the  quality  or  goodness  of  the  articles 
sold,  there  exists  between  these  two  systems  of  jurisprudence 
an  irreconcilable  disagreement.  According  to  the  civil  law, 
a  sound  price  implies  a  warranty  of  the  soundness  of  the 
article  sold.  By  the  common  law  [that  is,  the  early  common 
law],  the  vendor  is  not  bound  to  answer  to  the  vendee  for 
the  quality  or  goodness  of  the  articles  sold,  unless  he  ex- 
pressly warrants  them  to  be  sound  and  good,  or  unless  he 
knew  them  to  be  otherwise,  and  have  used  some  art  to  dis- 
guise them,  or  unless  they  turn  out  to  be  different  from  what 
he  represented  them  to  the  buyer ;  in  other  words,  there  must 
be  either  an  express  warranty,  or  fraud,  to  make  the  vendor 
answerable  for  the  quality  or  goodness  of  the  articles  sold. 
....  ,  .  In  Parkinson  v.  Lee  [2  East,  315],  decided  in 
1802,  .  .  .  the  counsel  for  the  plaintiff  pressed  upon  the 
court  the  doctrine  that  in  every  contract  of  sale  of  chattels, 
where  a  fair  price  was  paid,  there  was  an  implied  warranty 
that  the  commodity  sold  should  be  in  a  merchantable  con- 
dition at  the  time  of  the  sale.  This  doctrine  the  judges 
unanimously  rejected,  and  they  distinctly  and  emphatically 
reasserted  the  common  law  rule  of  caveat  emptor  in  all  its 
integrity.  The  decision  in  this  case,  as  I  understand  it, 
rejected  the  whole  doctrine  of  implied  warranty  in  regard 
to  the  quality  or  goodness  of  the  articles  sold,  as  inapplicable 
to  any  case  of  an  executed  contract  of  sale.  .  .  .  Since 
the  decision  of  that  case,  the  common  law  judges  at  West- 
minster-hall have  manifested  a  strong  disposition  to  borrow 
from  the  civil  law  its  doctrine  in  relation  to  sales  of  chattels. 
Departing  from  the  stern  policy  of  their  predecessors  in  re- 
sisting the  encroachments  of  the  civil  law,  and  impelled  by 
a  new  zeal  for  that  system  of  jurisprudence,  they  have,  step 
by  step,  introduced  into  the  English  system  of  the  common 
law  various  modifications  of  the  civil  law  doctrine  of  im- 
plied warranties  on  sales  of  chattels."  (Paige,  J.,  in  Har- 
gous  v.  Stone,  5  IS.  Y.  73,  81.) 

But,  says  Selden,  J.,  in  the  leading  case  of  Hoe  v.  San- 
lorn,  21  N.  Y.  552,  558,  "  The  theory  of  the  civil  and  of  the 


WARRANTY.  99 

common  law,  in  respect  to  these  implied  warranties,  is  en- 
tirely different.  The  civil  law  holds,  that  the  warranty 
enters  into  and  forms  an  integral  part  of  the  contract  of  sale 
itself,  as  will  be  seen  by  referring  to  Pothier's  definition  of 
a  sale,  and  his  statement  of  the  obligation  of  the  vendor  to 
warrant  against  latent  defects,  which  he  deduces  directly 
from  that  definition.  The  definition  he  gives  seems  to  be 
somewhat  strained  for  the  purpose  of  embracing  that  obliga- 
tion. (See  Pothier  on  Cont.  of  Sale,  Prelim.  Art.  and  Part 
II,  chap.  1,  §  4.) 

"  But  the  common  law,  with,  as  I  conceive,  better  logic, 
derives  the  obligation  from  the  general  doctrine  which  holds 
vendors  responsible  for  every  species  of  deception.  That  this 
is  the  true  source  of  this  warranty  at  the  common  law,  will 
be  rendered  apparent  by  reference  to  three  early  cases, 
.  .  .,  viz.,  Dale's  Case,  Cro.  Eliz.  44;  Furnis  v.  Leicester, 
Cro.  Jac.  474;  and  Cross  v.  Gardner,  Garth.  90;  S.  C.  1 
Show.  68.  These  cases  show  by  what  gradations  a  strong 
principle  of  justice  overcame  at  length  the  technical  rules 
of  the  common  law,  and  forced  the  courts  to  sustain  an 
action  for  a  deceit  without  any  averment  or  actual  proof  of 
willful  deception." 

Following  the  theory  of  the  civil  law  that  these  implica- 
tions enter  into  and  form  an  integral,  not  a  collateral,  part 
of  the  sale  transaction,  the  English  Sale  of  Goods  Act,  some 
courts,  and  some  text-writers,  treat  them  as  implied  condi- 
tions instead  of  implied  warranties,  but,  in  view  of  the  gen- 
eral trend  of  decisions  in  this  country,  and  in  England  prior 
to  the  enactment  of  the  Sale  of  Goods  Act,  we  shall,  as  before 
stated,  consider  them  under  the  designation  of  implied  war- 
ranties. 

Implied  warranties  and  caveat  emptor. — "  It  is  to  be  re- 
gretted," says  Paige,  J.,  in  Hargous  v.  Stone,  5  N.  Y..  73, 
88,  "  that  any  disposition  should  at  any  time  have  been  mani- 
fested by  our  courts  to  relax  the  rule  of  caveat  emptor,  and 
to  imply  a  warranty  where  none  was  either  actually  made  or 


100  SUMMARY  OF  SALES. 

intended  by  the  parties.  It  would  have  been  by  far  the 
wisest  and  best  policy  to  have  adhered  strictly  to  the  rule, 
that  the  seller,  in  the  absence  of  fraud  and  an  express  war- 
ranty, was  not  answerable  for  latent  defects.  The  ablest 
jurists  of  England  and  this  country  have  earnestly  and  elo- 
quently defended  the  wisdom  of  the  common  law  maxim  of 
caveat  emptor. 

"  The  rule  of  caveat  emptor  is  eminently  adapted  to  a 
commercial  community.  It  encourages  trade  by  preventing 
actions  against  all  in  turn  through  whose  hands  the  article 
of  commerce  has  passed  in  a  course  of  dealing.  Large  quan- 
tities of  products,  and  articles  of  manufacture,  are  daily  pass- 
ing through  the  hands  of  bona  fide  purchasers  and  of  agents, 
commission  merchants,  consignees  and  factors ;  and  to  apply 
to  these  persons  the  principle  of  caveat  venditor  would  lead 
to  endless  litigation,  and  seriously  embarrass  the  operations 
of  trade.  This  rule  creates  obligations  where  none  were  in- 
tended. It  implies  warranties  where  none  were  actually 
made.  The  most  just  and  convenient  rule  is,  to  confine  the 
responsibility  of  the  seller  in  relation  to  the  quality  and  good- 
ness of  the  articles  sold,  to  the  case  of  an  express  warranty 
or  fraud.  This  rule  will  effectuate  the  intention  of  the 
parties,  and  will  not  surprise  the  seller  with  responsibilities 
he  never  intended  to  assume.  Where  the  article  sold  is 
equally  accessible  to  both  parties,  and  its  quality  equally 
unknown  to  both,  there  can  be  neither  justice  nor  propriety 
in  implying  a  warranty  on  the  part  of  the  seller  against 
latent  defects.  It  is  more  just  to  require  the  purchaser  to 
apply  his  attention  to  those  particulars  which  are  within  the 
reach  of  his  observation  and  judgment,  and  the  vendor  to 
communicate  all  defects  within  his  knowledge  and  not  ap- 
parent on  inspection.  (I  Fonb.  Eq.  380  n.)  And  if  the 
purchaser  does  not  wish  to  run  the  risk  of  latent  defects,  to 
require  him  to  provide  himself  an  indemnity  against  such 
defects,  by  exacting  an  express  warranty  from  the  vendor. 
When  such  warranty  is  required,  the  vendor  will  be  at  liberty 


WARRANTY.  101 

to  decide  for  himself  whether  he  will  enter  into  a  contract  of 
warranty  or  not." 

Somewhat  of  an  opposite  view,  however,  was  taken  by 
Selden,  J.,  in  Hoe  v.  Sariborn,  21  N.  Y.  552,  557,  who  said, 
"  The  rule  of  the  civil  law,  viz.,  caveat  venditor,  was  adopted 
at  an  early  period,  and  in  reference,  as  it  would  seem,  rather 
to  those  articles  which  are  of  general  and  ordinary  use,  than 
to  such  as  enter  extensively  into  the  commerce  of  the  country ; 
while  that  of  the  common  law,  viz.,  caveat  emptor,  originating 
in  a  commercial  age,  and  among  a  highly  commercial  people, 
naturally  took  the  form  best  calculated  to  promote  the  free- 
dom of  trade.  No  doubt  the  common  law  rule  is,  upon  the 
whole,  wisest  and  best  adapted  to  an  advanced  state  of  society ; 
and  yet  there  is  a  large  class  of  cases  in  which  that  of  the 
civil  law  would  serve  to  prevent  a  multitude  of  frauds." 

Sale  of  specific  chattel  open  to  inspection. — "  Where 
goods  are  in  esse,  and  may  be  inspected  by  the  buyer,  and 
there  is  no  fraud  on  the  part  of  the  seller,  the  maxim 
caveat  em^tojLaj^ie&j. even  though  the  defect  which  exists  in 
them  is  latent,  and  not  discoverable  on  examination  at  least 
where  the  seller  is  neither  the  grower  nor  the  manufacturer. 
(Parkinson  v.  Lee,  2  East,  314.)  The  buyer  in  such  a  case 
has  the  opportunity  of  exercising  his  judgment  upon  the 
matter ;  and  if  the  result  of  the  inspection  be  unsatisfactory, 
or  if  he  distrusts  his  own  judgment  he  may  if  he  chooses 
require  a  warranty.  In  such  a  case,  it  is  not  an  implied  term 
of  the  contract  of  sale  that  the  goods  are  of  any  particular 
quality  or  are  merchantable/'  (Mellor,  J.,  in  Jones  v.  Just, 
L.  R.  3  Q.  B.  197.) 

"  No  principle  of  the  common  law  has  been  better  estab- 
lished, or  more  often  affirmed,  both  in  this  country  and  in 
England,  than  that  in  sales  of  personal  property,  in  the  ab- 
sence of  express  warranty,  where  the  buyer  has  an  oppor- 
tunity to  inspect  the  commodity,  and  the  seller  is  guilty  of 
no  fraud,  and  is  neither  the  manufacturer  nor  grower  of  the 


102  SUMMAEY    OF    SALES. 

article  he  sells,  the  maxim  of  caveat  emptor  applies."  (Bar- 
nard v.  Kellogg,  10  Wall.  383,  388.) 

"  The  rule  is  not  altered  by  the  fact  that  the  examination 
or  inspection  will  consume  time  or  is  attended  with  labor 
and  inconvenience.  No  exception  to  it  can  be  admitted,  to  use 
the  language  of  a  leading  case,  except  '  where  the  examina- 
tion at  the  time  of  the  sale  is,  morally  speaking,  imprac- 
ticable, as  where  goods  are  sold  before  their  arrival  or  land- 
ing. The  mere  fact  of  the  inspection  being  attended  with 
inconvenience  or  labor  is  not  equivalent  to  its  impracticability. 
If  the  purchaser  desire  to  avoid  it,  and  yet  obtain  the  pro- 
tection it  would  afford  him,  he  must  do  so  by  exacting  from 
the  vendor  an  express  warranty  of  quality.'  (Hyatt  v.  Boyle, 
5  Gill  &  J.  110.)"  (Mechem  on  Sales,  §  1312.) 

Executory  and  executed  agreements:  merchantability. — 

"  Where  a  contract  is  executory,  that  is,  to  deliver  an  article 
not  defined  at  the  time,  on  a  future  day,  whether 
the  vendor  has  at  the  time  an  article  of  the  kind 
on  hand,  or  it  is  afterward  to  be  procured  or  manu- 
factured, the  contract  carries  with  it  an  obligation  that  the 
article  shall  be  merchantable,  at  least  of  medium  quality  or 
goodness.  If  it  comes  short  of  this,  the  vendee  may  rescind 
the  contract  and  return  the  article  after  he  has  had  a  reason- 
able time  to  inspect  it.  He  is  not  bound  to  receive  or  pay 
for  it,  because  it  is  not  the  thing  he  agreed  to  purchase. 
But  if  the  article  is  at  the  time  of  the  sale  in 
existence  and  defined,  and  is  specifically  sold,  and  the  title 
passes  in  praesenti  to  the  vendee,  the  transaction  amounts  to 
an  executed  sale;  and  although  there  is  no  opportunity  for 
inspection,  there  will  be  no  implied  warranty  that  the  article 
is  merchantable.  . 

"  Where  the  sale  is  executory  if  the  goods  purchased  are 
found  on  examination  to  be  unsound,  or  not  to  answer  the 
order  given  for  them,  the  purchaser  must  immediately  return 
them  to  the  vendor  or  give  him  notice  to  take  them  back,  and 
thereby  rescind  the  contract ;  or  he  will  be  presumed  to  have 


WAREANTY.  103 

acquiesced  in  the  quality  of  the  goods."  (Hargous  v.  Stone, 

FiCTrTsrslT) 

Same :  fitness  for  special  use. — "In  the  case  of  executory 
contracts  for  the  making  or  furnishing  goods  or  articles  for 
a  special  use,  the  law  implies  a  contract  that  the  articles  to 
be  made  or  furnished  shall  be  reasonably  fit  and  proper  for 
the  use  for  which  they  are  ordered.  And  when  articles  thus 
agreed  to  be  made  or  furnished  are  delivered,  the  law  implies 
a  warranty  that  the  articles  are  reasonably  fit  and  proper 
for  that  use. 

u^But  there  is  no  implied  warranty  as  to  the  quality  of  an 
article  sold,  nor  of  its  fitness  for  any  particular  use,  where 

^^^••Mi^MHMMMfinAMMMMMMMitfMife^^MnMMBMM***..  '    •         • 

there  is  a  present  sale  of  a  particular  existing  article,  then 
open  to  the  examination  and  inspection  of  the  purchaser,  and 
wHere  he  requires  no  express  warranty.  To  use  the  illus- 
tration of  Maule,  J.,  in  Keates  v.  Cadogan,  10  C.  B.  291,  if 
a  man  says  to  another,  *  Sell  me  a  horse  fit  to  carry  me,' 
and  the  other  sells  him  a  horse  which  he  knows  to  be  unfit 
to  ride,  he  may  be  liable  for  the  consequences ;  but  if  a  man 
says,  '  Sell  me  that  grey  horse  to  ride,'  and  the  other  sells  it, 
knowing  that  he  cannot  ride  it,  that  would  not  make  him 
liable."  (Deming  v.  Foster,  42  N.  H.  165,  173.)  That  is, 
"  where  a  known,  described,  and  defined  article  is  ordered 
of  a  manufacturer,  although  it  is  stated  to  be  required  by 
the  purchaser  for  a  particular  purpose,  still  if  the  known, 
described,  and  defined  thing  be  actually  supplied,  there  is. 
no  warranty  that  it  shall  answer  the  particular  purpose 
intended  by  the  buyer."  (Mellor,  J.,  in  Jones  v.  Just,  L.  R. 
3  Q.  B.  197.)  See,  also,  Chanter  v.  Hopkins,  4  M.  &  W. 
399 ;  Seitz  v.  Brewers'  Refrig.  Co.,  141  U.  S.  510,  518. 

As  stated  by  a  learned  writer  hereon,  "  It  is  obvious  that  the 
question  whether  a  seller  is  bound  by  an  implied  obligation 
that  goods  shall  be  of  merchantable  quality  or  fit  for  a  particu- 
lar purpose  is  somewhat  different  in  the  case  of  a  contract  to 
sell  goods  by  description  and  in  the  case  of  an  executed  sale  of 
specified  goods.  If  the  seller  contracts  to  sell  goods  by 


104  SUMMARY  OF  SALES. 

description  it  may  well  be  argued  that  as  matter  of  construc- 
tion the  contract  means  not  any  goods  of  that  description  but 
goods  of  fair  or  merchantable  quality  of  that  description. 
That  is  probably  the  actual  meaning  of  the  parties.  On  the 
other  hand  if  the  seller  agrees  to  sell  a  specified  article  which 
the  parties  have  before  them,  it  is  clear  that  if  an  obligation 
is  imposed  upon  the  seller  it  cannot  be  derived  from  the  terms 
of  the  bargain  but  is  superadded  by  the  law.  The  obligation 
is  <?w<m-contractual,  rather  than  contractual.  Because  of  the 
difference  just  alluded  to,  some  courts  have  been  willing  to 
infer  an  obligation  to  furnish  merchantable  goods  if  the  bar- 
gain was  executory,  but  not  if  it  was  executed.  It  is  to  be 
observed,  however,  that  an  executory  contract  to  sell  may 
relate  to  a  specified  defined  article  and  on  the  other  hand  an 
executed  sale  may  relate  to  goods  identified  only  by  descrip- 
tion. The  distinction  which  the  courts  have  in  mind,  there- 
fore, is  not  properly  described  as  between  executory  contracts 
to  sell  and  executed  sales,  but  rather  between  bargains  relat- 
ing to  specified  property  and  bargains  relating  to  property 
specified  only  by  description."  (Williston  on  Sales,  §  230.) 

Implied  warranty  against  latent  defect:  when  seller  is 
manufacturer. — "A  manufacturer,  who  sells  goods  of  his 
own  manufacture,  impliedly  warrants  that  they  are  free 
from  any  latent  defect  growing  out  of  the  process  of  manu- 
facture. In  regard  to  the  justness  of  this  exception,  it  would 
seem,  aside  from  authority,  scarcely  possible  to  doubt.  If  the 
vendor  can  be  proved  to  have  had  knowledge  of  the  defect, 
and  failed  to  disclose  it,  all  agree  he  is  liable.  Is  it  not  rea- 
sonable to  presume  that  he  who  made  a  thing  which  has  a 
defect  arising  solely  from  the  manner  in  which  it  is  made,  is 
cognizant  of  that  defect?  Where  the  vendor  has  manu- 
factured the  article  with  his  own  hands,  the  inference  of 
knowledge  would,  plainly,  in  many  cases,  be  strong  enough 
to  charge  him  even  in  an  action  for  fraud.  But  if  the  manu- 
facturing is  done  by  agents,  the  general  principles  of  law 
would  hold  the  principal  responsible  for  those  whom  he  em- 


WARRANTY.  105 

ploys.  Wherever  the  vendor,  therefore,  has  himself  manu- 
factured the  article  sold,  or  procured  it  to  be  done  by  others, 
if  honesty  and  fair  dealing  are  ever  to  be  enforced  by  law,  a 
warranty  should  be  implied."  (Hoe  v.  Sanborn,  21  N.  Y/ 
552,  561.) 
See,  also,  Kellogg  Bridge  Co.  v.  Hamilton,  110  U.  S.  108. 

Same:  when  seller  is  dealer. — "According  to  the  English 
law  (and  also  under  the  American  Sales  Act)  the  seller  im- 
pliedly  warrants  the  merchantable  character  of  the  goods 
which  he  sells  as  fully  when  he  is  merely  a  dealer  in  goods 
of  that  description  as  when  he  is  a  manufacturer.  In  this 
country  some  jurisdictions  adopt  the  English  law  and  hold 
that  the  dealer  may  be  liable  upon  an  implied  warranty  in 
sales  of  specified  goods,  but  the  majority  of  American  deci- 
sions hold  that  no  such  warranty~~as  exists  where  a  manu- 
facturer is  the  seller  exists  where  the  seller  is  merely  a 
dealer."  (Williston  on  Sales,  §  233,  and  cases  therein  cited.) 

Implied  warranty  in  sale  by  sample. —  The  warranty  aris- 
ing in  this  class  of  transactions  "  is  perhaps  more  correctly  to 
be  regarded  as  an  express  than  an  implied  one.  It  is,  how- 
ever, so  commonly  classed  among  the  implied  warranties  that 
it  will  be  so  dealt  with  here,  and  the  warranty  which  the 
law  implies  may  be  declared  to  be  that  the  bulk  is  equal  to 
the  sample  in  quality,  kind  and  nature."  (Mechem  on  Sales, 
§  1320.) 

In  A.  &  8.  Henry  &  Co.  v.  Talcott,  175  N.  Y.  385,  389, 
it  is  said :  "  Upon  a  sale  by  sample  there  is  an  express  war- 
ranty that  the  i^nxls  are  equal  in  quality  to  the  sample  fur- 
nished. '  It  amounts  to  an  undertaking  on  the  part  of  the 
seller  with  the  purchaser  that  all  the  goods  are  similar  both 
in  nature  and  quality  to  those  exhibited.'  (Beirne  v.  Dord, 
5  N.  Y.  95,  98.)  It  is  sometimes  said  that  the  warranty  is 
implied,  although  the  effect  of  an  express  warranty  is  given 
to  it,  but  more  accurately  it  is  express,  the  affirmation  being 
made  by  the  sample  itself  silently  asserting  the  qualities  of 


106  SUMMARY  OF  SALES. 

the  bulk  it  represents.  The  sample  must  be  shown  as  an  in- 
ducement to  the  sale,  must  be  connected  with  the  contract  by 
the  circumstances  attending  the  sale  and  must  be  intended 
by  the  parties  as  the  basis  of  the  sale.  ( Gallagher  v.  Waring, 
9  Wend.  20;  affirmed  sub  nom.  Waring  v.  Mason,  18  Wend. 
425 ;  Story  on  Contracts,  §  540 ;  15  Am.  &  Eng.  Encyc.  1226 ; 
Benjamin  on  Sales,  §  667.) 

"  The  seller  need  not  state  that  the  bulk  of  the  goods  corres- 
pon3s~with  the  sample,  as  the  warranty  is  *  implied  in  fact/ 
and  is  express,  for  it  must  be  found  as  a  fact  that  the  parties 
intended  the  sale  to  be  made  by  sample,  and  that  the  exhibi- 
tion of  the  sample  was  regarded  by  them  as  in  effect  an  affir- 
mation as  to  the  quality  of  the  articles  sold.  (Gurney  v. 
Atlantic  &  G.  W.  Ry.  Co.,  58  K  Y.  358,  364;  Keener  on 
Quasi-Contracts,  5.)  In  the  absence  of  fraud  the  warranty 
does  not  cover  latent  defects,  unless  the  seller  is  the  manu- 
facturer, when  it  may  extend  to  latent  defects  growing  out 
of  the  process  of  manufacture.  If  upon  delivery  the  goods 
fall  below  the  quality  of  the  sample  the  buyer  may  either  re- 
ject them  or  may  accept  and  sue  for  damages  upon  the  war- 
ranty. (Zabriskie  v.  Central  Vt.  R.  R.  Co.,  131  N.  Y.  72 ; 
Kent  v.  Friedman,  101  N.  Y.  616 ;  Day  v.  Pool,  52  N.  Y. 
416.) 

"  The  rule  is  the  same  whether  the  goods  are  in  existence 
at  the  time  of  the  contract  of  sale  or  are  to  be  manufactured, 
although  it  is  sometimes  said  that  such  a  sale  is  not  techni- 
cally one  by  sample.  (Brigg  v.  Hilton,  99  1ST.  Y.  517;  Gur- 
ney v.  Atlantic  &  G.  W.  Ry.  Co.,  supra.) 

"  The  mere  exhibition  of  a  sample  is  not  of  itself  an  agree- 
ment to  sell  by  sample,  and  it  is  usually  a  question  of  fact 
for  the  jury  to  decide  whether,  under  all  the  circumstances, 
the  parties  intended  that  the  sale  should  be  made  in  that  way. 
Even  if  the  word  '  sample '  is  used  in  a  written  order  for 
goods  to  be  manufactured,  the  sale  is  not  by  sample  if  the 
order  contains  minute  specifications  and  descriptions,  involv- 
ing a  great  number  of  changes,  variations  and  differences 


WARRANTY.  107 

between  the  article  to  be  made  and  the  sample  shown.  (Smith 
v.  Coe,  55  App.  Div.  585;  affirmed,  170  N.  Y.  162.) 

"A  sale,  however,  may  be  made  partly  by  description  and 
partly  by  sample,  and  in  that  event  the  goods  must  corres- 
pond to  the  description  in  the  respect  covered  thereby,  and  to 
the  sample  in  other  respects.  (Bach  v.  Levy,  101  N.  Y.  511, 
514;  Gould  v.  Stein,  149  Mass.  570;  Burdick  on  Sales,  95; 
Benjamin  on  Sales  [7th  ed.],  684.) 

"  If  the  goods,  when  delivered,  do  not  equal  the  sample,  the 
buyer  need  not  return  them  in  order  to  recover  for  breach  of 
warranty,  although  an  offer  to  return  is  necessary  if  he  wishes 
to  rescind  the  sale  and  sue  for  the  amount  paid  in  advance 
of  delivery. 

"  The  chief  reason  for  exempting  sales  by  sample  from 
the  cardinal  rule  of  caveat  emptor  is  that  the  buyer  has  no 
chance  to  protect  himself  by  an  examination  of  the  com- 
modity sold.  When  the  goods  are  in  the  presence  of  the 
parties  at  the  time  of  the  sale  and  an  adequate  examination 
can  be  made,  even  if  it  is  inconvenient  or  difficult,  according 
to  the  weight  of  authority  the  sale  is  not  to  be  regarded  as 
made  by  sample  in  the  absence  of  an  express  agreement  to 
that  effect.  Parties  can  make  their  own  bargains  and  what- 
ever they  actually  agree  to  they  must  abide  by,  but  when 
nothing  is  said  or  written  upon  the  subject  and  the  buyer  has 
ample  opportunity  to  examine  and  inspect  for  himself  and 
to  thus  learn  the  quality,  in  the  absence  of  fraud,  there  is  no 
warranty,  even  if  samples  are  exhibited  by  the  seller,  because 
the  parties  stand  upon  an  equal  footing  and  the  interests  of 
commerce  require  that  the  rule  of  caveat  emptor  should 
apply.  Under  such  circumstances,  if  the  buyer  distrusts  his 
own  judgment  he  should  exact  a  collateral  warranty,  made  in 
express  terms,  and  not  rely  upon  the  silent  affirmation  of 
the  sample;  otherwise,  if  an  examination  is  practicable,  he 
must  make  it  at  his  peril,  for  if  no  advantage  is  taken  of  him 
through  misrepresentation  or  fraud,  the  law  requires  him  to 
look  out  for  himself.  We  thus  reach  the  foundation  upon 


108  SUMMARY  OF  SALES. 

which  sales  by  sample  rest,  for  it  is  the  absence  of  an  ade- 
quate opportunity  for  inspection  that  excepts  such  sales  from 
the  rule  of  caveat  emptor."  See,  also,  Barnard  v.  Kellogg,  10 
Wall.  383,  and  section  16  of  the  Uniform  Sales  Act. 

Implied  warranty:  sale  by  description. —  In  Hawkins  v. 
Pemberton,  51  N.  Y.  198,  certain  auctioneers  sold  for  the 
plaintiff  twenty-three  barrels  of  what  was  stated  by  the  auc- 
tioneer at  the  time  of  the  sale,  in  the  presence  of  the  plain- 
tiff and  the  defendants,  to  be  "  blue  vitriol,  sound  and  in  good 
order,"  and  Earl,  C.,  at  p.  202,  said :  "  Here  it  is  not  ques- 
tioned that  the  language  used  was  sufficient  to  constitute  a 
warranty  that  the  article  sold  was  sound  and  in  good  order ; 
and  why  should  it  not  as  well  extend  to  the  character  of  the 
article?  When  a  buyer  purchases  an  article  whose  true 
character  he  cannot  discover  by  any  examination  which  it  is 
practicable  for  him  to  make  at  the  time,  why  may  he  not  rely 
upon  the  positive  representation  of  the  seller  as  to  its  char- 
acter as  well  as  to  its  quality  and  condition  ?  I  can  discover 
no  distinction  in  principle  in  the  two  kinds  of  representation." 

In  Wolcott,  Johnson  &  Co.  v.  Mount,  36  N".  J.  Law,  262, 
266,  it  is  said,  that  "  The  doctrine  that  on  the  sale  of  a  chattel 
as  being  of  a  particular  kind  or  description,  a  contract  is  im- 
plied that  the  article  sold  is  of  that  kind  or  description,  is 
also  sustained  by  the  following  English  cases:  Powell  v. 
Horton,  2  Bing.  (N.  S.)  668 ;  Barr  v.  Gibson,  3  M.  &  W.  390 ; 
Chanter  v.  Hopkins,  4  M.  &  W.  399 ;  Nichol  v.  Godts,  10 
Exch.  191 ;  Qompertz  v.  Bartlett,  2  E.  &  B.  849 ;  Azemar  v. 
Casella,  Law  Rep.  2  C.  P.  431,  677;  and  has  been  approved 
by  some  decisions  in  the  courts  of  this  country.  (Henshaw 
v.  Robins,  9  Mete.  83;  Borrekins  v.  Bevan,  3  Rawle,  23; 
Osgood  v.  Lewis,  2  Harr.  &  Gill,  495 ;  Hawkins  v.  Pember- 
ton,  51  N.  Y.  198.) 

"  The  right  to  repudiate  the  purchase  for  the  non-conform- 
ity of  the  article  delivered,  to  the  description  under  which 
it  was  sold,  is  universally  conceded.  That  right  is  founded 
on  the  engagement  of  the  vendor,  by  such  description,  that 


"WAEEANTY.  109 

the  article  delivered  shall  correspond  with  the  description. 
The  obligation  rests  upon  the  contract.  Substantially,  the 
description  is  warranted.  It  will  comport  with  sound  legal 
principles  to  treat  such  engagements  as  conditions  in  order  to 
afford  the  purchaser  a  more  enlarged  remedy,  by  rescission, 
than  he  would  have  on  a  simple  warranty;  but  when  his 
situation  has  been  changed,  and  the  remedy,  by  repudiation, 
has  become  impossible,  no  reason  supported  by  principle  can 
be  adduced,  why  he  should  not  have  upon  his  contract  such 
redress  as  is  practicable  under  the  circumstances.  In  that 
situation  of  affairs,  the  only  available  means  of  redress  is  by 
an  action  for  damages.  Whether  the  action  shall  be  techni- 
cally considered  an  action  on  a  warranty,  or  an  action  for  the 
non-performance  of  a  contract,  is  entirely  immaterial."  Ke- 
ferring  to  Wolcott  v.  Mount,  supra,  it  is  said  in  Morse  v. 
Union  Stock  Yards,  21  Oregon,  289,  294,  "  strictly  speaking, 
the  conditions  do  not  become  warranties,  but,  the  sale  having 
become  consummated,  the  same  facts  which  before  constituted 
conditions  precedent  now  constitute  warranties." 
See,  also,  section  14  of  the  Uniform  Sales  Act. 

Implied  warranty:  food  products. — "In  3  Black.  Com. 
165,  it  is  stated  as  a  sound  and  elementary  proposition,  that 
in  contracts  for  provisions,  it  is  always  implied  that  they  are 
wholesome;  and  if  they  are  not,  case  lies  to  recover  damages 
for  the  deceit."  (Van  Bracklin  v.  Fonda,  12  Johns.  468.) 
"  It  is  practically  everywhere  agreed  that,  where  a  dealer 
or  ordinary  trader  sell  goods  for  immediate  consumption  by 
the  buyer,  an  implied  warranty  arises  that  the  goods  are 
wholesome  and  fit  for  human  food.  .  .  . ;  and  this  rule 
[from  Blackstone,  supra~]  has  been  often  quoted  in  the  earlier 
American  cases,  though  it  has  also  been  frequently  asserted 
that  the  American  cases  were  based  upon  a  misconception  of 
Blackstone's  meaning."  (Mechem  on  Sales,  §  1356.)  "  The 
language  of  the  commentator  [Blackstone]  leaves  it  some- 
what doubtful  whether  his  mind  was  not  upon  a  deceit  in  the 
sale,  which  stands  on  a  different  footing  from  a  warranty. 


110  SUMMARY  OF  SALES. 

If  he  intended  to  affirm  that  the  law  always  implies  a  war- 
ranty of  soundness  on  the  sale  of  provisions,  the  remark  is 
without  any  support  in  the  English  adjudications.  .  .  . 
The  doctrine  of  Blackstone,  with  a  very  important  qualifica- 
tion, was  approved  by  the  judge  who  prepared  the  opinion 
in  Van  Bracklin  v.  Fonda,  12  Johns.  468,  but  that  was 
plainly  a  case  of  fraud."  (Bronson,  Ch.  J.,  in  Moses  v. 
Mead,  1  Denio,  378,  387.)  Therefore,  concluded  Paige,  J., 
in  1851,  in  Hargous  v.  Stone,  5  N.  Y.  73,  85,  "  The  sale  of 
provisions  for  domestic  use  is  not  an  exception  to  the  general 
rule  of  caveat  emptor.  The  remedy  of  the  purchaser,  where 
the  provisions  turn  out  to  be  unwholesome,  is  given  on  the 
ground  of  the  knowledge  of  the  unsoundness  by  the  sellerj, 
which  the  law  presumes,  and  not  on  an  implied  warranty 
that  the  provisions  are  wholesome.  (Moses  v.  Mead,  1 
Denio,  378 ;  Van  Bracklin  v.  Fonda,  12  Johns.  468 ;  Emerson 
v.  Brigham,  10  Mass.  197,  202 ;  3  Black.  Com.  165.)  Where 
provisions  are  sold  as  merchandise,  and  not  for  immediate 
consumption  by  the  purchaser,  there  is  no  implied  warranty 
of  soundness.  (1  Denio,  378;  10  Mass.  197.)"  But  later, 
in  1860,  the  same  court,  by  Selden,  J.,  in  the  leading  case  of 
Hoe  v.  Sanborn,  21  N.  Y.  552,  560,  in  speaking  of  exceptions 
to  the  common-law  rule  of  caveat  emptor,  said :  "  One  of 
these  exceptions,  which  has  generally  been  recognized,  is,  that 
upon  the  sale  of  provisions,  which  are  purchased,  not  for  the 
purpose  of  resale,  but  to  be  consumed  by  the  purchaser,  there 
is  an  implied  warranty  that  such  provisions  are  sound  and 
wholesome."  And  in  Fairbank  Canning  Co.  v.  Metzger,  118 
N.  Y.  260,  267,  the  same  court,  by  Parker,  J.,  said:  "  It 
was  determined  in  Divine  v.  McCormick,  50  Barb.  116,  that 
in  the  sale  of  a  heifer  for  immediate  consumption,  a  war- 
ranty that  she  is  not  diseased  and  unfit  for  food  is  implied. 
That  decision  is  well  founded  in  principle,  and  is  in  accord- 
ance with  a  sound  public  policy,  which  demands  that  the 
doctrine  of  '  caveat  emptor '  shall  be  still  further  encroached 
upon  rather  than  that  the  public  health  shall  be  endangered." 
"  In  a  leading  case  in  Michigan  (Hoover  v.  Peters,  18 


WARRANT  Y.  Ill 

Mich.  51),  it  was  expressly  held  that  a  warranty  arises  upon 
a  sale  for  consumption  by  the  buyer,  although  the  seller  is 
not  a  dealer  or  trader  in  such  articles.  This  case,  however, 
stands  practically  alone,  and  the  clear  weight  of  the  author- 
ities is  certainly  to  the  eifect  that  where  the  seller  is  not  a 
dealer,  or,  though  a  dealer,  if  he  sells  to  another  dealer  as  an 
article  of  merchandise  merely  and  not  for  consumption  by 
the  buyer,  no  warranty  that  the  goods  are  fit  for  food  arises. 
An  action  for  deceit  may,  indeed,  be  maintained  in  such  cases 
upon  proof  of  knowledge  by  the  seller,  but  no  warranty 
exists."  (Mechem  on  Sales,  §  1357.)  Of  course,  a  manu- 
facturer of  food  products  impliedly  warrants  them  to  be  free 
from  latent  defects,  whether  the  same  be  sold  for  immediate 
consumption  or  for  resale.  (Fairbank  Canning  Co.  v.  Metz- 
ger,  118  "N.  Y.  260 ;  Copas  v.  Anglo-American  Provision  Go., 
73  Mich.  541.)  "  The  rule  is  well  settled  by  the  courts  of 
last  resort  in  many  of  the  states  that  a  vendor  of  an  article 
manufactured  by  him  for  a  particular  use,  impliedly  warrants 
it  against  all  such  defects  as  arise  from  his  unskillfulness 
either  in  selecting  the  materials  or  in  putting  them  together 
and  adapting  them  to  the  required  purpose.  (See  cases  cited 
in  Albany  Law  Journal,  vol.  18,  p.  324.) 

"  One  who  prepares  meat  for  the  wholesale  market  may  be 
said  to  come  within  that  rule."  (Fairbank  Canning  Co.  v. 
Metzger,  118  N.  Y.  260,  267.) 

"  In  Bigge  v.  Parkinson,  7  H.  &  N.  955,"  says  Professor 
Williston  in  a  note  to  section  242  of  his  work  on  Sales,  "  it 
was  held  that  the  rule  in  regard  to  provisions  was  like  the 
rule  as  to  other  goods.  So  in  the  English  Sale  of  Goods  Act 
there  is  no  separate  rule  established  for  provisions,  and  under 
the  general  rule  of  section  14  (1)  reliance  upon  the  seller's 
skill  or  judgment  is  essential.  This  provision  has  been  copied 
in  the  American  Sales  Act,  §  15  (1).  See,  also,  Farrell  v. 
Manhattan  Market  Co.,  198  Mass.  271;  Tomlinson  v.  Ar- 
mour, 74  N.  J.  L.  274." 


112  SUMMAKY    OF    SALES. 

Breach  of  warranty:  remedy  for. —  In  case  of  a  sale,  "A 
breach  of  this  collateral  agreement  by  the  seller  does  not  en- 
title the  buyer  to  return  the  goods ;  it  gives  him  only  a  right 
to  damages,  save  in  a  few  jurisdictions.  Such  is  the  rule, 
whether  this  engagement  is  collateral  from  the  first,  or 
whether,  being  an  essential  term  of  the  contract  and  available 
as  a  condition  precedent  to  the  buyer,  he  has  taken  title  to 
the  goods,  and  waiving  his  right  to  treat  the  engagement  as  a 
condition,  can  take  advantage  of  it  only  as  a  collateral  agree- 
ment. In  either  case,  the  title  to  the  goods,  having  vested  in 
the  buyer  with  the  assent  of  both  parties,  cannot  be  divested 
by  the  sole  act  of  either."  (Burdick  on  Sales  [2d  ed.],  140.) 
The  leading  English  case  in  support  thereof  is  Street  v.  Blay, 
2  B.  &  Ad.  456,  462,  and  the  leading  American  case  is  Thorn- 
ton v.  Wynn,  12  Wheat.  183,  193.  But  "  in  Massachusetts 
and  in  Maryland  the  vendee  has  his  option  to  retain  and  use 
the  property  and  recoup,  or  sue  on  his  warranty;  or  he  may 
return  it,  rescind  and  sue  for  the  consideration.  (Dorr  v. 
Fisher,  1  Cush.  271 ;  Bryant  v.  Isburgh,  13  Gray,  607 ;  Hyatt 
v.  Bayle,  5  Gill  &  J.  121 ;  Franklin  v.  Lang,  7  id.  407 ;  Butler 
v.  Blake,  2  Har.  &  J.  350.)"  (Day  v.  Pool,  52  N.  Y.  416, 
419.)  That  is,  "  to  avoid  circuity  of  action,  a  warranty  may 
be  treated  as  a  condition  subsequent,  at  the  election  of  the 
vendee,  who  may,  upon  a  breach  thereof,  rescind  the  contract, 
and  recover  back  the  amount  of  his  purchase-money,  as  in 
case  of  fraud.  But,  if  he  does  this,  he  must  first  return  the 
property  sold,  or  do  everything  in  his  power  requisite  to  a 
complete  restoration  of  the  property  to  the  vendor,  and,  with- 
out this,  he  cannot  recover."  (Dorr  v.  Fisher,  1  Cush.  271, 
273.) 

In  New  York  it  has  been  decided,  that  "  if  the  sale  is  of 
existing  and  specific  goods,  with  or  without  warranty  of 
quality,  the  title  at  once  passes  to  the  purchaser,  and  where 
there  is  an  express  warranty,  it  is,  if  untrue,  at  once  broken, 
and  the  vendor  becomes  liable  in  damages,  but  the  purchaser 
cannot  for  that  reason  either  refuse  to  accept  the  goods,  or 


WARRANTY.  113 

return  them.  If  the  contract  is  executory,  and  the  goods 
yet  to  be  manufactured,  no  title  can  pass  until  delivery  or 
some  equivalent  act  to  which  both  parties  assent,  and  when 
offered,  the  vendee  may  reject  the  goods  as  not  answering  the 
bargain,  but  if  the  sale  was  with  warranty,  he  may  receive 
the  goods  and  then  the  same  consequences  attach  as  in  the 
former  case,  and  among  others,  the  right  to  compensation  if 
the  warranty  is  broken."  (Brigg  v.  Hilton,  99  N.  Y.  517, 
529.)  See,  also,  Fairbank  Canning  Co.  v.  Metzger,  118 
K  Y.  260,  269. 

"  In  the  note  to  Cutter  v.  Powell,  in  Smith's  Leading  Cases, 
the  annotator  says :  *  It  is  settled,  by  Street  v.  Blay,  and 
Poulton  v.  Lattimore,  where  an  article  is  warranted,  and  the 
warranty  is  not  complied  with,  the  vendee  has  three  courses, 
any  one  of  which  he  may  pursue.  1.  He  may  refuse  to  re- 
ceive the  article  at  all.  2.  He  may  receive  it,  and  bring  a 
cross-action  for  the  breach  of  the  warranty.  3.  He  may,  with- 
out bringing  a  cross-action,  use  the  breach  of  warranty  in 
reduction  of  damages  in  an  action  brought  by  the  vendor  for 
the  price.'  The  annotator  proceeds  to  say,  '  that  it  was  once 
thought,  and,  indeed,  laid  down  by  Lord  Eldon,  in  Curtis 
v.  Hanney,  3  Esp.  83,  that  he  might  on  discovering  the  breach 
of  warranty,  rescind  the  contract,  return  the  chattel,  and,  if 
he  had  paid  the  price,  recover  it  back.  This  doctrine,  which 
was  opposed  to  Weston  v.  Dowries,  Doug.  23,  is  overruled  by 
Street  v.  Blay,  2  B.  &  Adol.,  and  Gompertz  v.  Denton,  1 
C.  and  Mee.  205 ;  and  it  is  clear  that,  though  the  non-com- 
pliance with  the  warranty  will  justify  him  in  refusing  to 
receive  the  chattel,  it  will  not  justify  him  in  returning  it, 
and  suing  to  recover  back  the  price.' 

"  The  second  and  third  propositions  of  this  learned  author 
are  indisputable,  and  have  received  the  sanction  of  this  court. 
(Thornton  v.  Wynn,  12  Wheat.  183,  as  modified  by  Withers 
v.  Greene,  9  How.  S.  C.  R.  213.)  The  first  proposition,  con- 
cerning the  right  of  the  purchaser  to  reject  the  article  because 
it  varies  from  the  warranty,  is  an  open  question."  (Lyon  v. 
Bertram,  20  How.  149,  154.) 
8 


114  SUMMARY  OF  SALES. 

"A  disputed  question  in  American  law  is  whether  a  buyer 
who  has  purchased  goods  with  a  warranty  may  return  the 
goods  and  rescind  the  sale  if  the  warranty  is  broken.  Accord- 
ing to  the  English  law,  he  may  not  [Street  v.  Blay,  2  B.  &  Ad. 
456;  Gompertz  v.  Denton,  1  Cr.  &  M.  207;  Dawson  v.  Colis, 
10  C.  B.  523;  Sale  of  Goods  Act,  §§  11  (1)  (b),  53  (1),  62 
(1)  ;  before  the  decision  of  Street  v.  Blay,  the  English  law 
was  supposed  to  allow  rescission;  Lord  Eldon  had  so  ruled 
in  Curtis  v.  Hannay,  3  Esp.  82],  but  in  Massachusetts  from 
an  early  day  it  has  been  continuously  held  that  such  rescis- 
sion is  allowable.  (Bradford  v.  Manly,  13  Mass.  139 ;  Perley 
v.  Batch,  23  Pick.  283 ;  Dorr  v.  Fisher,  1  Cush.  271,  273 ; 
Bryant  v.  Isburgh,  13  Gray,  607;  Smith  v.  Hale,  158  Mass. 
178;  Gilmore  v.  Williams,  162  Mass.  351,  352.)  The  au- 
thorities in  this  country  in  recent  times  have  been  divided. 
Though  the  text-writers  have  not  generally  recognized  the 
fact,  nearly  as  many  courts  have  followed  the  Massachusetts 
rule  as  have  followed  the  English  law."  (Professor  Willis- 
ton,  in  16  Harvard  Law  Rev.  465.) 

The  following  are  therein  cited  as  in  accord  with  the 
Massachusetts  rule:  Hodge  v.  Tufts,  115  Ala.  366;  Hoult 
v.  Baldwin,  67  Cal.  610;  Eagle  Iron  Works  v.  Des  Moines 
Ry.  Co.,  101  la.  289 ;  Gale  Mfg.  Co.  v.  Stark,  45  Kan.  606 ; 
Milliken  v.  Skillings,  89  Me.  180 ;  Edwards  v.  Noel,  88  Mo. 
App.  434;  Davis  v.  Hartlerode,  37  Neb.  864;  Canham  v. 
Piano  Mfg.  Co.,  3  N.  Dak.  229 ;  Byers  v.  Chapin,  28  Ohio 
St  300 ;  Optenburg  v.  Skelton,  109  Wis.  241,  244. 

The  following  are  therein  cited  as  in  accord  with  the  Eng- 
lish law:  Thornton  v.  Wynn,  12  Wheat.  183;  Worcester 
Mfg.  Co.  v.  Waterbury  Brass  Co.,  73  Conn.  554;  Woodruff 
v.  Graddy,  91  Ga.  333;  Kemp  v.  Freeman,  42  111.  App.  500 
(but  see  contra,  Sparling  v.  Marks,  86  111.  125)  ;  Wulschuer 
v.  Ward,  115  Ind.  219,  222;  Lightburn  v.  Cooper,  1  Dana 
(Ky.),  273;  H.  W.  Williams  Transportation  Line  v.  Darius 
Cole  Transportation  Co.,  129  Mich.  209 ;  Lynch  v.  Curfman, 
65  Minn.  170;  Fairbank  Canning  Co.  v.  Metzger,  118 


WABRANTY.  115 

N.  Y.  260,  269;  Eshleman  v.  LigUner,  169  Pa.  St.  46; 
Kauffman  Milling  Co.  v.  Stuckey,  40  S.  C.  110;  Hull  v. 
Caldwell,  3  S.  Dak.  451;  Allen  v.  Anderson,  3  Humph. 
(Term.)  581;  Wright  v.  Davenport,  44  Tex.  164;  Matteson 
v.  fioft,  45  Vt.  336. 

Further,  upon  the  same  subject,  see  4  Columbia  Law  Rev. 
1,  195  and  265;  Burdick  on  Sales,  2d  ed.,  140;  Mechem  on 
Sales,  §§  816,  1805;  Williston  on  Sales,  §  608. 

See  section  69  of  the  Uniform  Sales  Act  for  remedies 
therein  provided  for  breach  of  warranty. 

Warranty  not  available  to  subpurchasers. —  "  It  is  a  gen- 
eral rule  that  one  who  has  a  right  in  contract  may  assign  that 
right  in  effect  by  giving  the  assignee  the  power  to  enforce 
the  right  in  the  name  and  stead  of  the  assignor.  There  seems 
no  reason  why  a  warranty  should  be  an  exception  to  this 
rule.  But  however  this  may  be  it  seems  settled  that  the 
mere  resale  of  a  warranted  article  does  not  give  the  sub- 
purchaser  a  right  to  sue  the  original  seller  for  damages 
caused  by  him  by  defects  either  in  the  title  or  quality  of  the 
goods.  Two  reasons  may  be  given  for  this  result.  In  the 
first  place  the  sale  of  the  chattel  does  not  indicate  that  the 
seller  means  to  part  with  his  right  of  action  for  damages 
against  one  who  previously  sold  the  article  to  him;  on  the 
contrary,  it  may  be  assumed,  that  if  the  original  warranty 
has  been  broken,  the  original  purchaser  means  to  retain 
whatever  right  he  may  have.  Another  reason  is  that  a  war- 
ranty must,  it  seems,  like  an  insurance  policy,  be  construed 
as  a  contract  of  personal  indemnity.  Therefore,  though  one 
who  purchased  goods  with  a  warranty  might  assign  a  right  of 
action  already  accrued  on  the  warranty  he  could  not  enlarge 
its  scope  so  as  to  make  it  include  the  indemnification  of  sub- 
purchasers.  The  right  would  always  remain  a  right  to  dam- 
ages for  the  injury  the  first  buyer  suffered  by  the  defective 
condition  of  the  article.  As  stated  in  the  previous  section, 
however,  it  is  generally  held  that  a  buyer  who  has  bought 
goods  with  a  warranty  may  recover  damages  which  he  has 


116  SUMMARY  OF  SALES. 

been  compelled  to  pay  a  subpurchaser  to  whom  the  goods 
were  resold  with  a  similar  warranty.  In  this  way  the  original 
warrantor  is  frequently  in  effect  made  liable  in  the  same 
amount  that  he  would  have  been  had  the  warranty  been 
held  to  run  with  the  goods  as  a  covenant  of  warranty  runs 
with  the  land."  (Williston  on  'Sales,  §  244,  and  cases  cited.) 


PART  IV. 
STATUTE  OF  FRAUDS. 

Introduction. —  Sales  and  contracts  for  the  sale  of  per- 
sonal property,  in  any  form  and  to  any  amount,  were  recog- 
nized and  enforceable  at  common  law.  Proof  of  agreement 
to  transfer  the  absolute  property  in  goods  from  vendor  to 
vendee,  for  a  price  in  money  or  in  money  terms,  was  all 
that  was  required.  The  statute  of  29  Charles  II.,  cap.  3, 
entitled  "An  Act  for  prevention  of  Frauds  and  Perjuryes," 
commonly  called  the  Statute  of  Frauds,  has  not  changed  the 
principles  or  rules  of  sales  of,  and  contracts  to  sell,  personal 
property,  at  common  law,  heretofore  considered,  but  it  has 
an  important  additional  bearing  thereon,  and  therefore,  and 
for  the  purpose  of  clearness  and  simplicity,  is  herein  sepa- 
rately considered.  "Although  the  object  of  the  statute  of 
frauds  was  a  very  simple  one,  the  inconveniences  occasioned 
to  business  men  by  the  requirements  of  the  statute  developed 
an  intense  opposition  to  any  liberal  construction  of  it;  and 
the  result  has  been  to  cover  up  the  plain  meaning  of  the 
statute  by  an  overwhelming  amount  of  close  and  technical 
interpretation,  the  purpose  of  which,  more  or  less  concealed 
or  disguised,  is  to  minimize  its  operation.  This  general 
statement  is  necessary  to  an  appreciation  of  the  points  which 
are  raised  in  the  interpretation  of  the  statute  in  general,  and 
especially  in  the  interpretation  of  the  seventeenth  section  " 
(Tiedeman  on  Sales,  §  55),  which  relates  to  sales  of,  and 
contracts  to  sell,  personal  property. 

English  statute. — "  Noe  Contract  for  the  sale  of  any 
Goods,  Wares  or  Merchandises  for  the  price  of  ten  pounds 
Sterling  or  upwards  shall  be  allowed  to  be  good  except  the 
Buyer  shall  accept  part  of  the  Goods  soe  sold  and  actually 
receive  the  same  or  give  something  in  earnest  to  bind  the 

[117] 


118  SUMMARY  OF  SALES. 

Bargaine  or  in  part  of  payment,  or  that  some  Note  or  Memo- 
randum in  writeing  of  the  said  Bargaine  be  made  and  signed 
by  the  partyes  to  be  charged  by  such  Contract  or  their  Agents 
thereunto  lawfully  authorized."  (29  Car.  II.,  cap.  3,  §  17.) 

The  provisions  of  the  English  statute,  with  slight  changes, 
have  been  enacted  in  most  of  our  States,  excepting  Alabama, 
Arizona,  Delaware,  Illinois,  Kansas,  Kentucky,  Louisiana, 
New  Mexico,  North  Carolina,  Ohio,  Pennsylvania,  Rhode 
Island,  Tennessee,  Texas,  Virginia  and  West  Virginia. 
(Williston  on  Sales,  §  51.) 

The  present  provisions  of  the  English  statute  are  set  forth 
in  section  4  of  the  Sale  of  Goods  Act. 

Former  New  York  statute. —  Prior  to  September  1,  1911, 
the  law  of  New  York  was,  that  "  every  agreement,  promise  or 
undertaking  is  void,  unless  it  or  some  note  or  memorandum 
thereof  be  in  writing,  and  subscribed  by  the  party  to  be 
charged  therewith,  or  by  his  lawful  agent,  if  such  agreement, 
promise  or  undertaking;  .  .  . 

"  Is  a  contract  for  the  sale  of  any  goods,  chattels  or  things 
in  action  for  the  price  of  fifty  dollars  or  more,  and  the  buyer 
does  not  accept  and  receive  part  of  such  goods,  or  the  evi- 
dences, or  some  of  them,  of  such  things  in  action ;  nor  at  the 
time,  pay  any  part  of  the  purchase  money."  (Personal 
Property  Law,  being  ch.  41  of  N.  Y.  Consolidated  Laws  of 
1909,  §  31.)  This  was  repealed  by  L.  1911,  ch.  571,  and, 
section  85  thereof,  in  the  language  of  section  4  of  the  Uni- 
form Sales  Act,  with  the  exception  of  the  limit  of  price  or 
value,  which  remains  at  $50,  was  substituted  therefor. 

Uniform  Sales  Act :  statute  of  frauds. —  See  section  4  of 
the  Uniform  Sales  Act  for  provisions  of  the  Statute  of 
Frauds  relating  to  contracts  to  sell,  and  sales  of,  personal 
property. 

Sales  and  contracts  to  sell,  within  the  statute. —  One  of 
the  earliest  efforts  to  minimize  the  operation  of  the  statute 
is  seen  in  the  tendency  of  some  English  judges  to  narrow, 


STATUTE  OF  FRAUDS.  119 

by  construction,  its  application  exclusively  to  sales  (Towers 
v.  Osborne,  1  Strange,  506 ;  Clayton  v.  Andrews,  4  Burr. 
2101;  Groves  v.  Buck,  3  M.  &  S.  178),  while  others,  oppos- 
ing such  tendency,  and  following  the  spirit  of  the  statute, 
held  that  contracts  to  sell,  as  well  as  sales,  were  therein 
included.  (Rondeau  v.  Wyatt,  2  H.  Bl.  63 ;  Cooper  v.  El- 
ston,  7  T.  R.  14;  Garbutt  v.  Watson,  5  B.  &  Aid.  613.)  In 
1828,  however,  Lord  Tenterden's  Act  (9  Geo.  IV.,  cap.  14, 
s.  7)  was  passed,  and  English  conflict  thereon  was  definitely 
settled.  That  act  provided  that  the  17th  section  of  the 
Statute  of  Frauds  "  shall  extend  to  all  Contracts  for  the 
Sale  of  Goods  of  the  Value  of  Ten  Pounds  Sterling  and 
upwards,  notwithstanding  the  Goods  may  be  intended  to  be 
delivered  at  some  future  Time,  or  may  not  at  the  Time  of 
such  Contract  be  actually  made,  procured,  or  provided,  or 
fit  or  ready  for  Delivery,  or  some  Act  may  be  requisite  for 
the  making  or  completing  thereof,  or  rendering  the  same  fit 
for  Delivery." 

In  this  country,  need  for  such  an  act  was  never  experi- 
enced, American  courts  uniformly  holding  that  the  statute 
applied  as  well  to  contracts  to  sell  as  to  sales  (Bennett  v. 
Hull,  10  Johns.  364;  Crookshank  v.  Burrell,  18  Johns.  58; 
Waterman  v.  Meigs,  4  Cush.  497;  Hight  v.  Ripley,  19  Me. 
137;  Ide  v.  Stanton,  15  Vt.  685;  Atwater  v.  Hough,  29 
Conn.  513;  Carman  v.  Smick,  15  N".  J.  Law,  252;  Cason  v. 
Cheely,  6  Ga.  554),  the  New  York  court,  in  Bennett  v. 
Hull,  supra,  saying,  in  1813,  "  The  statute  applies  as  well 
to  executory  as  to  other  contracts;  and  the  decisions  of 
English  courts,  on  this  point,  in  Rondeau  v.  Wyatt,  2  H. 
Bl.  63,  and  in  Cooper  v.  Elston,  7  Term  Rep.  14,  contain 
the  sound  and  just  construction  of  the  statute."  See,  also, 
section  4  (1)  of  the  Uniform  Sales  Act. 

Exchange. —  In  this  country,  an  exchange  and  a  contract 
to  exchange  are  quite  generally  said  to  be  within  the  opera- 
tion of  the  Statute  of  Frauds  (Browne  on  St.  of  F.  [5th  ed.], 
§  293;  Williston  on  Sales,  §§  56,  69;  Mechem  on  Sales, 


120  SUMMARY  OF  SALES. 

§  328 ;  Bennett  v.  Hull,  10  Johns.  364 ;  Misner  v.  Strong, 
181  N.  Y.  163,  168;  Raymond  v.  Colton,  104  Fed.  Rep. 
219,  224;  Franklin  v.  Matoa  Gold  Min.  Co.,  158  Fed.  Rep. 
941,  943 ;  Dowling  v.  McKenney,  124  Mass.  478,  480 ;  Gor- 
man v.  Brossard,  120  Mich.  611,  613;  Wallace  v.  Long,  105 
Ind.  522,  526)  ;  but  the  cases  cited  in  support  of  the  state- 
ment, and  cases  in  which  the  statement  is  made,  are,  almost 
without  exception,  cases  of  sale  or  of  mixed  sale  and  exchange, 
and  not  cases  of  pure  exchange. 

In  Bennett  v.  Hull,  supra  (1813),  the  plaintiff  sued  the 
defendant  for  breach  of  promise  in  not  delivering  100  bar- 
rels of  apples,  for  which  he  was  to  receive  payment  in  liquors. 
So  far  as  the  case  discloses,  money  valuation  does  not  appear 
to  have  been  placed  on  either  kind  of  goods.  This  case, 
therefore,  presents  a  case  of  pure  exchange.  The  court  said, 
"  as  the  price  of  the  one  hundred  barrels  of  apples  is  pre- 
sumed to  have  been  above  twenty-five  dollars,  this  case  was 
clearly  within  the  statute  of  frauds."  Why,  except  upon  bald 
presumption,  it  was  so  obviously  within  the  statute,  is  not 
disclosed. 

In  Woodford  v.  Patterson,  32  Barb.  630,  a  promise  to 
deliver  goods  in  payment  of  a  pre-existing  debt  seems  to  have 
been  regarded  as  not  within  the  statute  as  a  bargain  for  the 
sale  of  goods.  In  view  of  the  almost  universally  recognized 
distinction  between  a  sale  and  an  exchange,  in  the  matter 
of  the  form  of  the  consideration,  the  common-law  require- 
ments of  pleading  (Mitchell  v.  Gile,  12  !N".  H.  390),  and  the 
exclusive  use  of  the  word  "  sale  "  in  the  statute,  reasons  for 
excluding  exchanges  from  the  operation  of  the  statute  would 
seem  the  more  cogent,  and  Judge  Chalmers  (Sale  of  Goods 
[7th  ed.],  6,  note)  says,  "when  a  statute  refers  in  terms  to 
contracts  of  sale  (as,  for  instance,  the  Sale  of  Goods  Act  or 
the  Stamp  Act),  it  seems  clear  that  it  would  have  no  applica- 
tion to  contracts  of  exchange." 

As  to  its  intentional  inclusion  under  the  Uniform  Sales 
Act,  there  can  be  no  doubt,  as  by  sub-section  2  of  section  9 
"  the  price  may  be  made  payable  in  any  personal  property." 


STATUTE  OF  FRAUDS.  121 

Pleading  the  statute  as  defense. —  In  England,  at  com- 
mon law,  the  defendant  was  not  required  to  plead  the  statute 
specially  as  a  defense,  as  he  could  avail  himself  of  it  under 
the  general  issue  (Buttermere  v.  Hayes,  5  M.  &  W.  456; 
Eastwood  v.  Kenyan,  11  A.  &  E.  435),  even  as,  in  some 
jurisdictions,  he  seemingly  still  may  do  (May  v.  Sloan,  101 
U.  S.  231,  237;  Dunphy  v.  Ryan,  116  U.  S.  491,  495;  Mor- 
gart  v.  Smouse,  103  Md.  463 ;  Bean  v.  Lamprey,  82  Minn. 
320 ;  Young  v.  Led  ford,  99  Mo.  App.  565 ;  Thompson  v. 
Frakes,  112  la.  485),  but,  in  New  York,  and  in  some  other 
jurisdictions  (Montague  v.  Bacharach,  187  Mass.  128 ;  Fee 
v.  Sharkey,  59  1ST.  J.  Eq.  284;  Hemmings  v.  Doss,  125  N.  C. 
400;  Taliaferro  v.  Smiley,  112  Ga.  62;  Carter  v.  Fischer, 
127  Ala.  52;  Koenig  v.  Dohm,  209  111.  468),  the  reverse  is 
the  rule. 

In  Crane  v.  Powell,  139  1ST.  Y.  379,  388,  it  is  said:  "  The 
Statute  of  Frauds  is  a  shield  which  a  party  may  use  or  not 
for  his  protection  just  as  he  may  use  the  Statute  of  Limita- 
tions, the  statute  against  usury,  that  against  betting  and 
gaming,  and  others  that  might  be  mentioned.  I  take  it  to  be 
a  general  rule  of  universal  application  that  the  statutes  last 
mentioned  are  not  available  to  a  party  unless  specifically 
pleaded,  and  there  is  no  reason  for  making  the  Statute  of 
Frauds  an  exception  to  the  rule. 

"  The  present  system  of  procedure  is  founded  upon  the 
idea  that  litigants  should,  when  possible,  know  in  advance 
the  precise  questions  they  must  meet  at  the  trial.  When  a 
contract  is  set  out  in  the  complaint  as  the  cause  of  action, 
and  the  defendant  intends  to  assail  it  on  some  special  or 
statutory  ground,  the  general  spirit  of  the  system  is  not  com- 
plied with  unless  notice  is  given  of  this  intention  to  the 
opposing  party  by  the  pleadings. 

"  In  the  solution  of  this  question  the  provisions  of  the  code 
should  not  be  overlooked.  The  statute  may  be  used  as  a 
defense  to  actions  on  certain  agreements.  A  defense  must 
now  be  presented,  either  by  demurrer  or  answer.  (Code, 
§  487.) 


122  SUMMARY  OF  SALES. 

"  When  the  defect  in  the  plaintiff's  cause  of  action  appears 
on  the  face  of  the  complaint,  the  defense  must  ['  must ' 
should  read  '  may ',  according  to  Seamans  v.  Barentsen,  180 
K  Y.  333,  336]  be  interposed  by  demurrer.  (§  488.)  When 
the  complaint  does  not,  .  .  .,  disclose  an  invalid  agree- 
ment upon  its  face,  but  it  is,  in  fact,  invalid  for  some  reason, 
the  defendant  must  take  the  objection  by  answer  (§  498), 
and  if  the  objection  is  not  taken  in  either  way,  the  defend- 
ant is  deemed  to  have  waived  it  (§  499)."  See,  also,  F anger 
v.  Caspary,  87  App.  Div.  417,  420. 

"  The  question  was  distinctly  decided  in  that  case  [refer- 
ring to  Crane  v.  Powell,  supra],  and  it  was  held  that  the 
statute  was  a  defense,  and  unless  pleaded  was  not  available 
to  the  defendant  to  defeat  the  action.  The  case  must  be 
regarded  as  settling  the  law  of  this  state  upon  a  question 
upon  which  courts  of  different  jurisdictions  have  differed 
in  opinion.  This  court  regarded  the  rule  adopted 
in  Crane  v.  Powell  as  sound  in  principle  and  as 
supported  by  the  rule  applied  in  analogous  cases.  .  •  .» 
It  is  plain,  upon  the  view  that  the  Statute  of  Frauds  does  not 
make  an  oral  contract  within  its  terms  illegal,  but  only  void- 
able at  the  election  of  the  party  sought  to  be  charged,  that 
such  election  must  be  manifested  in  some  affirmative  way. 
The  mere  denial  in  the  answer  of  the  contract  alleged  in  the 
complaint,  when  the  character  of  the  contract  is  not  dis- 
closed, is  quite  consistent  with  an  intention  to  put  in  issue 
simply  the  fact  whether  any  agreement  was  entered  into, 
either  oral  or  written.  One  of  the  rules  established  by  the 
English  Judicature  Act,  as  amended  in  1875  (38  and  39 
Viet.,  ch.  77,  rule  19),  ordained  that,  '  where  a  contract  is 
alleged  in  any  pleading,  a  bare  denial  of  the  contract  by  the 
opposite  party  shall  be  construed  only  as  a  denial  of  the  mak- 
ing of  the  contract,  and  not  of  its  legality  or  its  sufficiency 
in  law,  whether  with  reference  to  the  Statute  of  Frauds  or 
otherwise,'  and  in  Towle  v.  Topham,  37  L.  T.  (N.  S.)  309, 
Jessel,  M.  R.,  applied  the  rule  to  the  pleadings  in  an  equity 
case.  The  statutory  rule  enacted  by  the  English  Judicature 


STATUTE  OF  FRAUDS.  123 

Act  was  regarded  by  this  court  in  Crane  v.  Powell,  as  declar- 
ing the  true  rule  independently  of  statute. 

"  The  mere  denial  in  the  answer  in  the  present  case  of  the 
contract  alleged  in  the  complaint  did  not,  therefore,  raise 
any  question  under  the  Statute  of  Frauds,  and  it  could  not 
be  raised  by  objection  on  the  trial,  to  the  proof  of  the  oral 
contract,  for  the  very  conclusive  reason  that  the  statute  must 
be  pleaded  before  the  validity  of  the  contract  on  that  ground 
can  be  assailed."  (Matthews  v.  Matthews,  154  N.  Y.  288, 
291.)  It  should  be  observed  that  there  was  no  amendment 
of  the  pleadings  in  the  Matthews  case. 

Later,  in  Brauer  v.  Oceanic  Steam  Navigation  Co.,  178 
N".  Y.  339,  where  the  character  of  the  contract  was  disclosed 
by  the  plaintiff  declaring  on  a  written  contract,  and  where 
the  defendant  did  not  plead  the  statute  as  a  defense,  the  court, 
at  p.  343,  said :  "  Ever  since  the  decision  in  Crane  v.  Powell, 
139  N.  Y.  379,  the  law  has  been  settled  in  this  state,  what- 
ever uncertainty  there  may  have  been  on  the  subject  before, 
that  to  avail  himself  of  the  defense  of  the  Statute  of  Frauds 
the  defendant  must  in  a  proper  case  plead  the  statute.  It 
is  to  be  borne  in  mind,  however,  that  in  the  case  now  before 
us  the  plaintiff  declared  on  a  written  contract  and  the  l  statute 
concerns  oral  contracts  only;  written  contracts,  of  whatever 
nature,  are  untouched  by  its  provisions.'  (Browne  on  Frauds, 
§  344  a.)  It  is  difficult  to  see  how  the  defendant  could  plead 
that  a  written  contract  was  not  reduced  to  writing  nor  any 
note  or  memorandum  thereof  made  in  writing.  If  it  be 
possible  for  such  a  plea  to  be  true,  it  can  be  true  only  in 
the  sense  that  it  charges  that  the  written  contract  was  not 
made  at  all.  This,  however,  the  defendant  has  sufficiently 
pleaded,  for  it  has  specifically  denied  the  allegation  of  the 
complaint  that  a  written  contract  was  executed.  Proof  by 
the  plaintiff  of  an  oral  contract  instead  of  a  written  contract 
did  not  constitute  any  such  variance  as  required  the  court  on 
the  trial  to  dismiss  the  complaint.  It  did  not  change  the 
cause  of  action,  and  if  necessary  the  court  could  have 
amended  the  complaint  to  conform  to  the  facts  proved.  But 


124  SUMMARY  OF  SALES. 

the  extension  of  such  a  favor  to  the  plaintiff  could  not  in 
any  respect  deprive  the  defendant  of  its  rights.  Therefore, 
when  the  oral  contract  was  proved  either  in  lieu  or  in  sup- 
port of  the  written  one  declared  on  in  the  complaint,  the 
defendant  could  properly  raise  the  objection  of  the  stat- 
ute by  a  motion  to  dismiss  or  for  the  direction  of  a  verdict." 

"Every  agreement,  etc.,  is  void  unless." — Various  ex- 
pressions have  been  used  in  the  statutes  of  our  States  indic- 
ative of  the  effect  of  the  statute  upon  common-law  transac- 
tions that  come  under  its  operation.  The  statute  of  Charles 
II.  declared  that  "  noe  Contract  for  the  sale  of,  etc.,  shall 
be  allowed  to  be  good  except,"  but  this  has  been  changed 
in  the  English  Sale  of  Goods  Act  (§  4  [1])  and  in  the 
American  Uniform  Sales  Act  (§  4  [1])  to  read  "  shall  not 
be  enforceable  by  action  unless."  The  effect,  upon  the  com- 
mon law,  of  the  expressions  used  prior  to  the  expression  used 
in  the  last  two  above-named  acts,  has  been  quite  generally 
regarded  as  evidentiary,  and  so,  it  is  sometimes  said,  the 
statute  introduced  merely  a  rule  of  evidence,  neither  adding 
to  nor  subtracting  from  the  principles  of  the  common  law, 
although  some  expressions,  as  in  the  earlier  New  York  stat- 
ute, have  been  very  positive.  In  Maddison  v.  Alderson,  8 
App.  Cas.  467,  488,  Lord  Blackburn  said:  "I  think  it  is 
now  finally  settled  that  the  true  construction  of  the  Statute  of 
Frauds,  both  the  4th  and  17th  sections,  is  not  to  render  the 
contracts  under  them  void,  still  less  illegal,  but  is  to  render 
the  kind  of  evidence  required  indispensable  when  it  is  sought 
to  enforce  the  contract." 

In  Crane  v.  Powell,  139  N.  Y.  3T9,  383,  the  court  said: 
"  The  Statute  of  Frauds  does  not  prohibit  the  making  of 
any  agreement  in  any  way  that  the  parties  may  see  fit  nor 
render  them  illegal  or  immoral  if  not  made  in  some  par- 
ticular way.  ...  It  introduced  a  new  rule  of  evidence 
in  certain  cases  without  condemning  as  illegal  any  contract 
that  was  legal  before."  And  later,  in  Matthews  v.  Matthews, 


STATUTE  OF  FRAUDS.  125 

154  K  Y.  288,  291,  the  same  court  said:  "  It  is  plain, 
.  that  the  Statute  of  Frauds  does  not  make  an  oral 
contract  within  its  terms  illegal,  but  only  voidable  at  the 
election  of  the  party  sought  to  be  charged."  That  is,  although 
the  legislature  has  used  the  word  "  void  "  in  the  statute, 
the  courts  have  interpreted  that  word  to  mean,  and  to  be  the 
equivalent  of,  "  voidable."  Under  general  interpretation, 
therefore,  the  statute  may  be  regarded  as  establishing  a  rule 
of  remedial  procedure,  rather  than  a  mere  rule  of  evidence. 
"Under  the  English  statute  it  has  been  held  that  only  the 
enforcibility,  not  the  validity,  of  a  bargain  depends  upon 
the  satisfaction  of  the  statute.  It  is  even  said  that  the  only 
effect  of  the  statute  is  to  require  certain  evidence  in  order 
to  prove  the  bargain.  .  .  .  Nevertheless  it  seems  that 
the  effect  of  the  statute  is  more  far-reaching  than  a  rule  of 
evidence.  In  the  first  place  a  memorandum  made  after  the 
beginning  of  the  action  will  not  satisfy  the  statute.  ^Again, 
it  is  generally  held  that  the  statute  must  be  affirmatively 
pleaded.  If  only  a  rule  of  evidence  were  involved  this  would 
be  unnecessary.  To  be  sure  the  requirement  of  a  special 
plea  is  by  no  means  universal;  for  in  England  at  common 
law,  and  still  in  many  jurisdictions,  the  defendant  may  take 
advantage  of  the  statute  under  the  general  issue.  The  words 
of  the  English  statute  also  seem  to  express,  if  naturally 
construed,  more  than  a  rule  of  evidence.  For  this  reason  it 
seems  better  to  call  the  rule  of  the  statute  one  of  remedial 
procedure,  somewhat  analogous  to  the  rule  of  the  Statute  of 
Limitations,  rather  than  a  mere  rule  of  evidence."  (Willis- 
ton  on  Sales,  §  71.)' 

May  third  persons  set  up  the  statute  as  defense?  —  If  the 

effect  of  the  statute  is,  as  we  have  seen,  to  render  a  sale  or  a 
contract  to  sell  voidable  or  merely  unenforceable,  and  not 
void,  if  the  statute  interposes  a  rule  of  remedial  procedure, 
something  more  than  a  mere  rule  of  evidence,  it  would 
seem  to  follow  that  those  who  were  not  parties  to  a  sale  or 
to  a  contract  to  sell  could  not  claim  that  those  transactions 


126  SUMMABY    OF    SALES. 

were  invalid,  because  the  parties  thereto  did  not  comply  with 
the  requirements  of  the  statute.  It  has  been  said,  that 
"  parties  to  contracts  and  their  privies  can  alone  take  advan- 
tage of  the  fact  that  a  contract  is  invalid  under  the  Statute 
of  Frauds.  Many  forms  of  expression  by  this  and  other 
courts  illustrate  the  doctrine  that  a  third  person  cannot 
make  the  Statute  of  Frauds  available  to  overthrow  a  trans- 
action between  other  persons ;  that  the  defense  of  this  statute 
is  purely  a  personal  one,  and  cannot  be  made  by  strangers. 
.  It  concerns  the  remedy  alone,  and  the  modern  law 
is  well  settled  that,  in  the  absence  of  a  statutory  provision  to 
the  contrary,  the  effect  of  the  statute  is  not  to  render  the 
agreement  void,  but  simply  to  prevent  its  direct  enforcement 
by  the  parties,  and  to  refuse  damages  for  its  breach." 
(Jackson  v.  Stanfield,  137  Ind.  592,  620.)  See,  also, 
Browne  on  the  Statute  of  Frauds  (5th  ed.),  §  135,  and  cases 
cited ;  Amsinck  v.  American  Ins.  Co.,  129  Mass.  185. 

But,  says  Professor  Williston  (Sales,  §  72),  "  much  of  the 
authority  seems,  however,  without  good  reason,  to  be  con- 
trary. The  buyer  has  not  been  allowed  to  sue  a  carrier  for 
goods  injured  in  transit  when  title  had  passed  at  common 
law,  but  the  statute  had  not  been  satisfied.  (Morgan  v. 
Sykes,  stated  in  3  Q.  B.  486 ;  O'Neill  v.  N.  Y.,  etc.,  R.  R. 
Co.,  60  N.  Y.  138.)  It  has  been  held  in  Florida  that  a 
buyer  could  not  maintain  an  action  against  a  third  person  for 
detaining  property  which  the  buyer  had  bought,  the  statute 
not  having  been  satisfied.  (Summerall  v.  Thorns,  3  Fla. 
298.)  Other  decisions,  however,  are  opposed  to  this  prin- 
ciple. (Garcia  v.  U.  S.f  37  Ct.  Cl.  243 ;  Norton  v.  Simonds, 
124  Mass.  19.)  Further,  though  in  Minnesota  and  New 
York  it  has  been  held  that  a  buyer  under  such  a  sale  cannot 
maintain  an  action  against  an  officer  who  attaches  the  goods 
as  the  property  of  the  seller  (Waite  v.  McKelvy,  71  Minn. 
167;  Ely  v.  Ormsby,  12  Barb.  570),  in  opposition  to  these 
cases  are  decisions  in  Maine  and  New  Jersey,  allowing  the 
action  against  the  officer.  (Cowan  v.  Adams,  10  Me.  374; 
Sherron  v.  Humphreys,  2  Green  [N.  J.  L.],  217.)  Under 


STATUTE  OF  FRAUDS.  127 

a  Federal  statute  allowing  compensation  to  loyal  owners  of 
property  captured  or  destroyed  during  the  Civil  War,  the 
Supreme  Court  of  the  United  States  had  to  consider  the 
question  whether  the  buyer  of  cotton,  under  a  sale  in  which 
the  statute  had  not  been  satisfied,  could  be  regarded  as 
owner,  and  the  court  held  that  he  could  not.  (Mohan  v. 
U.  S.f  16  Wall.  143,  147.)  The  court  cites  no  authorities 
in  support  of  its  statement,  however ;  and  a  later  decision  by 
the  same  court,  involving  almost  precisely  the  same  question, 
expressed  a  contrary  view  without  citing  the  earlier  case. 
(Briggs  v.  U.  8.,  143  U.  S.  346.)" 

Reason,  however,  is  all  in  favor  of  disallowing  third  parties 
from  availing  themselves  of  the  defense  of  the  statute,  and 
should  prevail  in  New  York,  particularly  since  the  decision 
of  the  Court  of  Appeals  in  Crane  v.  Powell,  139  N.  Y.  379. 

"  Contract  for  the  sale  of." — "  There  are,  at  least,  three 
distinct  views  as  to  the  meaning  of  the  words  in  the  statute. 
These  may  be  called,  for  the  sake  of  convenience,  the  Eng- 
lish, the  Massachusetts  and  the  New  York  rule,  as  repre- 
senting the  decisions  in  the  respective  courts. 

"  The  English  rule  lays  special  stress  upon  the  point, 
whether  the  articles  bargained  for  can  be  regarded  as  goods 
capable  of  sale  by  the  professed  seller  at  the  time  of  delivery, 
without  any  reference  to  the  inquiry  whether  they  were  in 
existence  at  the  time  of  the  contract  or  not.  If  a  manu- 
facturer is  to  produce  an  article  which  at  the  time  of  the 
delivery  could  be  the  subject  of  sale  by  him,  the  case  i» 
within  the  statute  of  frauds.  The  rule  excludes  all  cases 
where  work  is  done  upon  the  goods  of  another,  or  even 
materials  supplied  or  added  to  the  goods  of  another.  Thus, 
if  a  carriage-maker  should  repair  my  carriage,  both  furnish- 
ing labor  and  supplying  materials,  it  would  be  a  contract 
for  work  and  labor,  as  the  whole  result  of  his  efforts  would 
not  produce  a  chattel  which  could  be  the  subject  of  sale  by 
him.  If,  on  the  other  hand,  by  the  contract  he  lays  out  work 
or  materials,  or  both,  so  as  to  produce  a  chattel  which  he 


128  SUMMARY  OF  SALES. 

could  sell  to  me,  the  contract  is  within  the  statute.  This 
conclusion  has  been  reached  only  after  great  discussion  and 
much  fluctuation  of  opinion,  but  must  now  be  regarded  as 
settled.  The  leading  case  upon  this  point  is  Lee  v.  Griffin, 
1  Best  &  Smith,  272.  .  .  . 

"  The  Massachusetts  rule,  as  applicable  to  goods  manufac- 
tured or  modified  after  the  bargain  for  them  is  made,  mainly 
regards  the  point  whether  the  products  can,  at  the  time  stipu- 
lated for  delivery,  be  regarded  as  '  goods,  wares  and 
merchandise,'  in  the  sense  of  being  generally  marketable 
commodities,  made  by  the  manufacturer.  .  .  .  The 
test  is  not  the  non-existence  of  the  commodity  at  the  time 
of  the  bargain.  It  is,  rather,  whether  the  manufacturer 
produces  the  article  in  the  general  course  of  his  business,  or 
as  the  result  of  a  special  order.  (Goddard  v.  Binney,  115 
Mass.  450.)  .  .  . 

"  The  New  York  rule  is  still  different.  It  is  held  here 
by  a  long  course  of  decisions,  that  an  agreement  for  the  sale 
of  any  commodity  not  in  existence  at  the  time,  but  which 
the  vendor  is  to  manufacture  or  put  in  a  condition  to  be 
delivered,  such  as  flour  from  wheat  not  yet  ground,  or  nails 
to  be  made  from  iron  belonging  to  the  manufacturer,  is  not 
a  contract  of  sale.  The  New  York  rule  lays  stress  on  the 
word  sale.  There  must  be  a  sale  at  the  time  the  contract  is 
made.  The  latest  and  most  authoritative  expression  of  the 
rule  is  found  in  a  recent  case  in  this  court.  (Parsons  v. 
Loucks,  48  N".  Y.  17, 19.)"  Cooke  v.  Nillard,  65  N.  Y.  352. 

The  English  rule  is  undoubtedly  the  most  logical.  "  Lee 
v.  Griffin,  however,  has  found  but  little  following  in  the 
United  States,  while  the  Massachusetts  rule  seems  likely  to 
be  received  with  favor  wherever  the  courts  are  not  debarred 
by  earlier  decisions  from  adopting  it."  (Mechem  on  Sales, 
§  326.)  The  following,  among  others,  have  adopted  the 
Massachusetts  rule:  Crockett  v.  Scribner,  64  Me.  447; 
Prescott  v.  Locke,  51  N.  H.  94;  Atwater  v.  Hough,  29  Conn. 
508;  Eoubicek  v.  Haddad,  67  N.  J.  Law,  522;  Gross  v. 
Heckert,  120  Wis.  314;  Schloss  v.  Josephs,  98  Minn.  442; 


STATUTE  OF  FRAUDS.  129 

Yoe  v.  Newcomb,  33  Ind.  App.  615;  Flynn  v.  Dougherty, 
91  Cal.  669.  The  Uniform  Sales  Act  (§  4  [2])  also  adopts 
the  Massachusetts  rule,  and  New  York,  by  L.  1911,  ch.  571, 
is  now  in  line  with  Massachusetts. 

The  New  York  rule,  with  little,  if  anything,  to  commend 
it,  has  a  slender  following,  being  recognized  in  Forsyth  v. 
Mann,  68  Vt.  116;  Bagby  v.  Walker,  78  Md.  239;  Suber 
v.  Pullin,  1  S.  C.  273 ;  Dierson  v.  Petersmeyer,  109  la.  233. 

"Goods,  chattels."— The  language  of  the  statute  of  29 
Charles  II.  was  "  goods,  wares  or  merchandises,"  which  has 
been  changed  to  "  goods  "  in  the  Sale  of  Goods  Act,  and  to 
"  goods  or  choses  in  action  "  in  the  Uniform  Sales  Act.  The 
language  of  the  former  New  York  statute  (Personal  Property 
Law,  §  31)  was  "goods,  chattels  or  things  in  action." 

This  provision  of  the  statute  relates  to  personal  property, 
and  not  to  real  property  which  is  governed  by  another  pro- 
vision of  the  statute.  (N.  Y.  Eeal  Property  Law,  §  242.) 
The  statute  relating  to  personalty  imposes  a  monetary  limi- 
tation, but  offers  three  alternatives,  viz.,  writing,  or  accept- 
ance and  receipt,  or  part  payment,  any  one  of  which  will 
satisfy  the  statutory  requirements.  The  statute  relating  to 
realty  imposes  no  monetary  limitation,  but  offers  only  one 
way  of  satisfying  the  statutory  requirements,  viz.,  by  a 
writing.  Therefore  it  is  important  to  determine  whether  a 
particular  transaction  is  one  for  the  sale  of  goods  or  of  an 
interest  in  land,  as  the  Statute  of  Frauds  prescribes  the  kind 
of  evidence  for  each,  but  does  not  attempt  to  define  each 
transaction ;  it  "  takes  things  as  it  finds  them,  and  provides 
for  lands  and  goods  according  as  they  were  so  estimated 
before  its  enactment."  (Dunne  v.  Ferguson,  1  Hayes  [Irish], 
R.  542,  as  stated  in  Green  v.  Armstrong,  1  Denio,  550,  555.) 

Land :   in   general. — "  The  word   land  is  comprehensive 

in  its  import,  and  includes  many  things  besides  the  earth 

we  tread  on,  as  waters,  grass,  stones,  buildings,  fences,  trees 

and  the  like;  for  all  these  may  be  conveyed  by  the  general 

0 


130  SUMMARY  OF  SALES. 

designation  of  land.  (1  Shep.  Touch,  by  Preston,  91;  1 
Inst.  4;  1  Preston  on  Estates,  8;  2  Black.  Com.  17,  18;  1 
R.  S.  387,  §  2;  2  id.  137,  §  6.)"  Green  v.  Armstrong,  1 
Denio,  550,  554. 

Standing  trees. — "  Standing  trees  are  ...  part  and 
parcel  of  the  land  in  which  they  are  rooted,  and  as  such  are 
real  property.  They  pass  to  the  heir  by  descent  as  part  of 
the  inheritance,  and  not,  as  personal  chattels  do,  to  the  exec- 
utor or  administrator.  [Toller's  Law  of  Executors,  193— 
195;  2  Black.  Com.  by  Chitty,  122,  note;  Rob.  on  Frauds, 
365-366;  Richard  Lifers  Case,  11  Rep.  46;  Com.  Dig. 
Biens  (H.).]  And  being  strictly  real  property,  they  can- 
not be  sold  on  an  execution  against  chattels  only.  (S  cor  ell 
v.  Boxall,  1  Younge  &  Jer.  396;  Evans  v.  Roberts,  5  Barn. 
&  Cress.  829.)"  Green  v.  Armstrong,  1  Denio,  550,  554. 

In  an  article  on  the  subject  of  Sales  of  Standing  Trees,  8 
Harvard  Law  Rev.  367,  Mr.  Edmund  H.  Bennett  says :  "  It 
may  not  be  possible  to  reconcile  all  the  decisions,  much  less 
all  the  dicta,  on  this  subject,  but  the  general  drift  of  the 
cases  seems  to  support  several  propositions. 

"  1.  The  first  is  where  the  vendor  has  expressly  stipulated 
that  the  trees  may  remain  standing  on  the  land  a  given 
number  of  years,  if  the  purchaser  elects.  Here,  as  they  may, 
and  probably  will,  derive  more  or  less  growth  and  increase 
from  the  soil,  there  is  some  reason  to  hold  that  the  sale  in- 
volves an  *  interest  in  land.  '  In  fact  it  has  been  considered 
a  sale  not  only  of  the  trees  as  they  then  are,  but  as  they 
will  be  at  the  end  of  the  stipulated  period,  with  all  the  addi- 
tions to  them  subsequently  acquired  from  the  soil. 

"  The  case  of  Green  v.  Armstrong,  1  Denio,  550,  deserves 
to  be  considered  the  leading  one  on  this  point.  .  .  .  This 
decision  has  been  often  approved  in  New  York.  . 

"  The  subject  was  elaborately  examined  with  the  same 
conclusion  in  Kingsley  v.  Holbrook,  45  N.  H.  313,  .  .  ., 
and  this  was  approved  in  Howe  v.  Bachelder,  45  N.  H.  204. 

"  2.  The  second  class  of  cases  is  where  the  trees  are  to 


STATUTE  OF  FRAUDS.  131 

stand  for  an  indefinite  time,  and  to  be  severed  solely  at  the 
pleasure  of  the  buyer.  Here  also  some  decisions  and  more 
dicta  declare  that  the  same  rule  applies. 

"  Buck  v.  Pickwell,  27  Vt.  157,  is  one  of  the  most  im- 
portant of  this  class. 
##•**##•*#•* 

"  Still  another  view  is  that  if  the  trees  are  sold  t  as  trees,' 
and  are  not  to  be  first  cut  by  the  vendor  and  delivered  in  their 
new  condition,  it  is  immaterial  whether  they  are  to  stand,  or 
do  in  fact  stand,  a  long  or  a  short  time  after  the  sale ;  in  either 
case  they  are  to  be  considered  at  the  time  of  sale  as  realty, 
and  therefore  the  statute  applies.  This  subject  was  recently 
examined  in  Hirth  v.  Graham,  50  Ohio  St.  57,  where  it 
was  held  to  be  immaterial  whether  the  parties  did  or  did 
not  contemplate  an  immediate  severance  and  removal  of  the 
trees,  the  contract  of  sale  was  invalid  if  not  in  writing; 

•          •  • 

"  4.  On  the  other  hand,  there  is  much  authority  as  well 
as  reason  for  holding  that  if  either  expressly  or  by  a  fair 
construction  of  the  contract,  the  trees  are  forthwith  or  within 
a  reasonable  time  to  be  cut  and  severed  from  the  realty  and 
thus  made  personal  property  (no  matter  by  which  party), 
and  are  not  to  gain  additional  growth  and  size  from  the  soil, 
it  is  not  a  sale  of  any  '  interest  in  land '  and  not  within  the 

Statute  [as  to  realty], 
###*##**# 

"  This  class  of  cases  is  based  upon  the  principle  that  the 
contract  is  to  be  considered  as  an  executory  agreement  for 
a  sale,  to  take  effect  only  when  the  trees  are  severed  from 
the  land,  and  converted  into  personal  property,  coupled, 
however,  with  a  license  to  the  purchaser  to  enter,  sever,  and 
remove  the  trees,  if  the  seller  is  not  to  do  so.  (See  Hill  v. 
Hill,  113  Mass.  103;  United  Society  v.  Brooks,  145  Mass. 
415;  Fletcher  v.  Livingston,  153  Mass.  390.)  The  moment 
they  are  cut  they  become  the  personal  property  of  the  pur- 
chaser and  may  be  sold  by  him,  like  any  other  personal  prop- 
erty, and  his  purchaser  has  the  same  right  to  go  and  take 


132  SUMMAEY    OF    SALES. 

them  away;  for  the  license  to  remove  them  becomes  irrev- 
ocable. (Yale  v.  Seely,  15  Vt.  221;  Nelson  v.  Nelson, 
6  Gray,  385;  Cool  v.  The  Peters  Box  &  Lumber  Co., 
87  Ind.  531.)  The  license  may  be  revoked  before  the  cutting, 
since  the  trees  are  not  yet  the  property  of  the  purchaser,  and 
if  revoked,  his  only  remedy  is  against  the  seller  for  breach 
of  contract  in  not  allowing  him  to  enter  and  take  the  trees, 
the  same  as  in  a  refusal  to  deliver  any  other  personal  property 
contracted  for.  This  was  the  case  in  Whitemarsh  v.  Walker, 
1  Met.  313.  .  .  .  Much  stress  seems  to  be  sometimes 
laid  on  the  circumstance  which  party  is  to  cut  the  trees. 
That  seems  quite  immaterial,  except  that  where  the  seller 
agrees  to  do  so,  and  to  deliver  the  thing  sold,  either  as  cord- 
wood  or  as  timber,  it  more  clearly  appears  to  be  a  sale,  not 
of  trees,  but  of  what  had  once  been  trees,  but  was  so  no 
longer.  This  was  really  the  case  of  Smith  v.  Surman,  9  B. 
&  C.  561.  .  .  .  And  this  has  been  so  held  even  in  New 
York,  notwithstanding  the  case  of  Green  v.  Armstrong,  1 
Denio,  550.  (Killmore  v.  Hewlett,  48  N".  Y.  569.)  But 
if  the  vendee  has  a  right  to  enter  and  cut  the  trees  and  does 
so,  they  are  thereby  changed  into  personal  property  as  much 
as  if  cut  by  the  vendor,  and  it  can  make  no  difference  by 
whom  the  axe  is  wielded." 


Crops :  cultivated  and  natural. — "  It  is  otherwise  with 
growing  crops,  as  wheat  and  corn,  the  annual  produce  of 
labor  and  cultivation  of  the  earth;  for  these  are  personal 
chattels,  and  pass  to  those  entitled  to  the  personal  estate, 
and  not  to  the  heir.  (Toller,  150,  194;  2  Black.  Com.  404.) 
They  may  also  be  sold  on  execution  like  other  personal  chattels 
(Whipple  v.  Foot,  2  Johns.  418;  Jones  v.  Flint,  10  Adol.  & 
Elis,  753 ;  Peacock  v.  Purvis,  2  Brod.  &  Bing.  362 ;  Hart- 
well  v.  Bissell,  17  John.  128.) 
********* 

"  The  following  cases  may  be  cited  to  show  that  growing 
crops  of  grains  and  vegetables,  fructus  industrials,  being 
goods  and  chattels,  and  not  real  estate,  may  be  conveyed  by 


STATUTE  OF  FRAUDS.  133 

a  verbal  contract,  as  they  may  also  be  sold  on  execution  as 
personal  chattels.  (Carrington  v.  Roots,  2  Mees.  &  Wels. 
248 ;  Sainsbury  v.  Matthews,  4  id.  343 ;  Randall  v.  Ramer, 
2  John.  421,  note;  Munford  v.  Whitney,  15  Wend.  387; 
Austin  v.  Sawyer,  9  Co  wen,  39 ;  Jones  v.  Flint,  10  Adol. 
&  Ellis,  753;  Warwick  v.  Bruce,  2  Maule  &  Selw.  205; 
Graves  v.  Weld,  5  Barn.  &  Adol.  105.) 

"  But  where  the  subject-matter  of  a  contract  of  sale  is 
growing  trees,  fruit  or  grass,  the  natural  produce  of  the 
earth  \Jructus  naturales^,  and  not  annual  productions  raised 
by  manurance  and  the  industry  of  man,  as  they  are  parcel  of 
the  land  itself,  and  not  chattels,  the  contract,  in  order  to  be 
valid,  must  be  in  writing.  ( Teal  v.  Auty,  2  Brod.  &  Bing.  99 ; 
Putney  v.  Day,  6  K.  Hamp.  R.  430;  Olmsted  v.  Niles,  7 
id.  522;  Crosby  v.  Wadsworth,  6  East,  602;  Rodwell  v. 
Phillips,  9  Mees.  &  Wels.  501 ;  Jones  v.  Flint,  10  Adol.  & 
Ellis,  753.)"  Green  v.  Armstrong,  1  Denio,  550,  554.  See, 
also,  Williston  on  Sales,  §  61. 

Water  and  ice. —  Water  contracted  to  be  supplied  at  a 
certain  price  per  million  gallons  has  been  held  to  come  within 
"  goods,  wares  and  merchandise  "  and  so  within  the  statute 
relating  to  personalty,  but  ice,  before  severance,  has  been 
held  to  be  real  property  because  "  connected  with  and  in  the 
nature  of  an  accession  to  the  land."  (Wash.  Ice  Co.  v.  Short- 
all,  101  111.  46.)  See,  also,  Hoag  v.  Place,  93  Mich.  450; 
Howe  v.  Andrews,  62  Conn.  398.  However,  in  Higgins  v. 
Kusterer,  41  Mich.  318,  324,  the  court  held  a  contract  for 
the  sale  of  ice  formed,  but  uncut,  as  one  relating  to  person- 
alty, saying :  "  In  its  frozen  condition,  it  drew  nothing 
from  the  land  and  got  no  more  support  from  it  than  a  log 
floating  on  water  would  have  had.  ...  It  can  only 
be  used  and  sold  as  personalty,  and  its  only  use  tends  to  its 
immediate  destruction.  We  think  it  should  be  dealt  with  in 
law  according  to  its  uses  in  fact,  and  that  any  sale  of  ice 
already  formed,  as  a  distinct  commodity,  should  be  held  a 
sale  of  personalty,  whether  in  the  water  or  out  of  the  water." 


134  SUMMARY  OF  SALES. 

Fixtures. —  In  the  United  States,  courts  quite  generally 
hold  that  a  contract  for  the  sale  of  fixtures  is  a  contract  for 
the  sale  of  goods,  wares  and  merchandise,  and  so  within  the 
Statute  of  Frauds  relating  to  sales  of  personal  property. 
(Russell  v.  Richards,  10  Me.  429 ;  Sawyer  v.  Long,  86  Me. 
541;  Dame  v.  Dame,  38  K  II.  429;  Shaw  v.  Corbrey,  13 
Allen,  462;  Howard  v.  Fessenden,  14  Allen,  124;  Morris  v. 
French,  106  Mass.  326 ;  Strong  v.  Doyle,  110  Mass.  92 ;  Ross' 
Appeal,  9  Pa.  St.  491;  Scoggin  v.  Slater,  22  Ala.  687;  Long 
v.  White,  42  Ohio  St.  59  ;  Rogers  v.  Cox,  96  Ind.  157 ;  Powell 
v.  McAshan,  28  Mo.  70;  Edwards  v.  Rank,  57  Neb.  323.) 
But  if  the  land  to  which  the  fixtures  are  annexed  is  sold 
before  severance  to  a  bona  fide  purchaser,  the  fixtures  will 
pass  as  appurtenant  to  the  land,  unless  expressly  reserved 
in  the  deed.  (Gibbs  v.  Estey,  15  Gray,  587;  Dolliver  v. 
Ela,  128  Mass.  559.)  If,  however,  a  tenant  sells  fixtures  to 
his  landlord,  the  transaction  has  been  held  not  to  fall  within 
the  Statute  of  Frauds  relating  to  personalty  or  realty  (Lee 
v.  Gaskell,  1  Q.  B.  Div.  700 ;  South  Baltimore  Co.  v.  Muhl- 
bach,  69  Md.  395)  ;  it  is  simply  a  surrender  of  the  tenant's 
right  to  sever.  If  parties  bargain  to  sell  and  deliver  a  house 
or  the  materials  composing  it,  the  contract  is  one  for  the  sale 
of  goods  (Scoggin  v.  Slater,  22  Ala.  687;  Long  v.  White,  42 
Ohio  St.  59),  but  an  oral  reservation  of  a  building  by  the 
owner  of  the  land  at  the  time  of  conveyance  will  not  operate 
to  convert  it  into  personalty.  (Noble  v.  Bosworth,  19  Pick. 
314;  Leonard  v.  Clough,  133  N".  Y.  292.)  It  has  even  been 
said,  that  in  "  applying  the  Statute  of  Frauds,  buildings  are 
not  classed  with  forest  trees,  but  with  growing  crops,  nursery 
trees,  and  fixtures  attached  to  realty.  And  buildings  are 
realty  or  personalty,  according  to  the  intention  of  the  parties... 
And  when  the  parties  in  interest  agree  that  they  ma£_be.. 
severed  and  moved  from  the  realty,  buildings  are  held  and 
treated  as  personalty."  (Long  v.  White,  42  Ohio  St.  59, 
61.) 

In  England  the  courts  have  generally  held  more  strictly 
to  the  maxim  quod  plantatur  solo,  solo  cedit,  relaxing  only 


STATUTE  OF  FRAUDS.  135 

as  between  tenant  and  landlord  or  life-tenant  and  remainder- 
man. "  It  is  very  difficult  to  understand,  on  general  prin- 
ciples, how  the  title  to  these  annexations  and  products  of  the 
soil  can  be  said  to  pass  under  a  contract  for  the  sale  of  goods, 
etc.,  before  a  severance  from  the  soil,  and  yet  the  title  thus 
acquired  be  lost  by  a  subsequent  sale  of  the  land  to  one  who 
is  ignorant  of  the  prior  sale  of  the  fixtures  or  product  of  the 
soil.  And  in  every  such  transaction,  there  is  coupled  with 
the  contract  for  the  sale  of  the  thing  a  license  to  go  upon  the 
land  for  the  purpose  of  severing  and  removing  it  from  the 
land.  That  surely  is  an  interest  in  and  concerning  land, 
whether  the  thing  to  be  removed  be  a  fixture,  a  natural  or 
artificial  product  of  the  soil.  So  far  at  least  as  the  license 
is  concerned,  it  is  a  contract  for  the  sale  of  an  interest  in 
land,  and  must  come  within  the  fourth  section  of  the  statute 
[referring  to  the  original  English  statute  relating  to  land], 

"Another  objection  to  the  theory  of  the  authorities  that 
the  title  passes  before  severance,  is  that,  until  severance,  the 
thing  has  no  separate  legal  existence,  and  everything  has  not 
been  done  to  complete  the  contract.  There  is  no  delivery 
and  there  can  be  none,  until  a  severance  has  been  effected. 

"  The  better  opinion,  independent  of  the  authorities, 
would  seem  to  be,  that  any  contract,  which  undertakes  to 
pass  title  to  anything  annexed  to  the  soil,  without  severance, 
is  a  contract  for  the  sale  of  an  interest  in  land,  whatever 
may  be  the  character  of  the  thing  to  be  severed,  and  falls 
within  the  fourth  section  of  the  statute."  (Tiedeman  on 
Sales,  §  59.) 

"  It  seems  pretty  plain,  upon  principle,"  says  Lord  Black- 
burn (Cont.  of  Sales  [2d  Am.  ed.],  4),  "  that  an  agreement 
to  transfer  the  property  in  something  that  is  attached  to  the 
soil  at  the  time  of  the  agreement,  but  which  is  to  be  severed 
from  the  soil  and  converted  into  goods  before  the  property  is 
to  be  transferred,  is  an  agreement  for  the  sale  of  goods  within 
the  meaning  of  the  9  Geo.  4,  c.  14,  if  not  of  the  29  Car.  2,  c. 
3.  The  agreement  is,  that  the  thing  shall  be  rendered  into 
goods  and  then  in  that  state  sold;  it  is  an  executory  agree- 


136  SOMMABY    OF    SALES. 

ment  for  the  sale  of  goods,  not  existing  in  that  capacity  at 
the  time  of  the  contract.  And  when  the  agreement  is,  that 
the  property  is  to  be  transferred  before  the  thing  is  severed, 
it  seems  clear  enough,  that  it  is  not  a  contract  for  the  sale 
of  goods,  it  is  a  contract  for  sale,  but  the  thing  to  be  sold 
is  not  goods.  If  this  be  the  principle,  the  true  subject  of 
inquiry  in  each  case  is,  when  do  the  parties  intend  that  the 
property  is  to  pass :  if  the  things  perish  by  inevitable  acci- 
dent before  the  severance,  whom  do  they  mean  to  bear  the 
loss  ?  for  in  general  that  is  a  good  test  of  whether  they  intend 
the  property  to  pass  or  not;  in  other  words,  if  the  contract 
be  for  the  sale  of  the  things  after  they  have  been  severed  from 
the  land  so  as  to  become  the  subject  of  larceny  at  common 
law,  it  is,  at  least,  since  the  9  Geo.  IV.  c.  14,  a  contract  for 
the  sale  of  goods,  wares,  and  merchandises,  within  the  17th 
section  of  the  Statute  of  Frauds.  If  the  contract  be  for 
the  sale  of  the  things  whilst  they  are  attached  to  the  soil  and 
not  the  subject  of  larceny  at  common  law,  it  is  a  contract  for 
the  sale  of  things,  crops,  fixtures,  emblements,  trees  or  min- 
erals, which  may  or  may  not  be  an  interest  in  land  within 
the  4th  section  of  the  statute,  but  are  not  goods,  wares,  and 
merchandise  within  the  17th  section.  On  the  whole  the  cases 
are  very  much  in  conformity  with  these  distinctions,  though 
there  is  some  authority  for  saying  that  a  sale  of  emblements 
or  fixtures  vesting  an  interest  in  them,  whilst  in  that  capacity, 
and  before  severance,  is  a  sale  of  goods  within  the  meaning 
of  the  17th  section  of  the  Statute  of  Frauds,  and  a  good  deal 
of  authority  that  such  a  sale  is  not  a  sale  of  an  interest  in 
land,  within  the  4th  section,  which,  however,  may  be  the 
case  though  it  is  not  a  sale  of  goods,  wares  and  merchandise 
within  the  17th." 

"  Things  in  action  " :  stocks,  bills  and  notes. —  Under  the 
original  English  statute,  the  expression  "  goods,  wares  and 
merchandises "  has  been  held  insufficient  to  include  choses 
in  action,  even  though  they  were,  as  certificates  of  stock,  and 
bills  and  notes,  measurably  visible  and  tangible.  In  this 


STATUTE  OF  FRAUDS.  137 

country,  however,  it  has  been  held,  under  statutes  similar 
in  expression  to  the  English  statute,  that  certificates  of  stock, 
and  bills  and  notes  are  within  the  operation  of  the  statute. 
"  The  words  '  goods '  and  '  merchandise ',  are  both  of  very 
large  signification.  Bona,  as  used  in  the  civil  law,  is  almost 
as  extensive  as  personal  property  itself,  and  in  many  respects 
it  has  nearly  as  large  a  signification  in  the  common  law.  The 
word  '  merchandise '  also,  including,  in  general,  objects  of 
traffic  and  commerce,  is  broad  enough  to  include  stocks  or 
shares  in  incorporated  companies. 

"  There  are  many  cases  indeed  in  which  it  has  been  held 
in  England,  that  buying  and  selling  stocks  did  not  subject 
a  person  to  the  operation  of  the  bankrupt  laws,  and  thence 
it  has  been  argued  that  they  cannot  be  considered  as  mer- 
chandise, because  bankruptcy  extends  to  persons  using  the 
trade  of  merchandise.  But  it  must  be  recollected  that  the 
bankrupt  acts  were  deemed  to  be  highly  penal,  and  coercive, 
and  tended  to  deprive  a  man  in  trade  of  all  his  property. 
But  most  joint-stock  companies  were  founded  on  the 
hypothesis  at  least,  that  most  of  the  shareholders  took  shares 
as  an  investment  and  not  as  an  object  of  traffic;  and  the  con- 
struction in  question  only  decided,  that  by  taking  and  holding 
such  shares  merely  as  an  investment,  a  man  should  not  be 
deemed  a  merchant  so  as  to  subject  himself  to  the  highly 
coercive  process  of  the  bankrupt  laws."  (Tisdale  v.  Harris, 
20  Pick.  9,  13.)  Again,  "In  Tisdale  v.  Harris,  supra,  it 
was  decided  that  a  contract  for  the  sale  of  shares  in  a  manu- 
facturing corporation  is  a  contract  for  the  sale  of  goods  or 
merchandise  within  the  statute;  and  the  reasons  on  which 
that  decision  was  founded  seem  fully  to  authorize  a  similar 
decision  as  to  promissory  notes  of  hand.  A  different  decision 
has  recently  been  made  in  England,  in  Humble  v.  Mitchell, 
3  Perry  &  Davison,  141 ;  S.  C.  11  Adolph.  &  Ellis,  207." 
(Baldwin  v.  Williams,  3  Met.  365,  367.) 

Where  the  statute  expressly  includes  "  choses  in  action," 
or  "  things  in  action,"  no  difficulty  whatever  in  determining 
the  application  of  the  statute  to  contracts  to  sell,  or  sales  of, 


138  SUMMARY    OF    SALES. 

stocks  or  bills  and  notes  would  seem  to  be  experienced.  (See 
Artcher  v.  Zeh,  5  Hill,  200;  Tompkins  v.  Sheehan,  158  N". 
Y.  617.) 

"  For  the  price  of."—  The  statute  of  29  Charles  II.  em- 
ploys the  expression  "  for  the  price  of,"  but  Lord  Tenterden's 
Act  and  the  Sale  of  Goods  Act  employ  the  expression  "  of 
the  value  of."  The  expression  "  of  the  value  of  "  is  also 
employed  in  the  Uniform  Sales  Act  (§4),  but  is  not  used 
in  any  of  the  statutes  of  the  States  that  have  not  as  yet 
enacted  the  Uniform  Sales  Act,  the  word  "  price "  being 
commonly  employed.  The  use  of  the  word  "  value  "  in  the 
Uniform  Sales  Act  is  in  keeping  with  the  statement  (§9 
[2]  )  that  "  the  price  may  be  made  payable  in  any  personal 
property,"  that  is,  in  goods  as  well  as  in  money,  and  therefore 
there  can  be  no  question  but  that  barter  and  sale  are  equally 
included  by  that  act  within  the  statute. 

Further,  hereon,  see  Williston  on  Sales,  §  69. 

"  Fifty  dollars  or  more."—  The  Statute  of  Frauds  relat- 
ing to  contracts  to  sell,  and  to  sales  of,  personal  property,  is 
applicable  only  when  the  goods  reach  a  certain  price  (or 
value),  or  more.  The  amount  fixed  by  the  statute  of  Charles 
II.  was  £10  or  upwards,  which  remains  the  same  in  the  Sale 
of  Goods  Act.  In  the  United  States  it  varies  from  $30  in 
Arkansas,  Maine  and  Missouri  to  $2,500  in  Ohio,  while  in 
Florida  and  Iowa  all  transactions  for  the  sale  of  goods,  of 
whatever  value,  are  within  the  statute. 

When  is  the  limit  reached  or  exceeded. —  That  a  trans- 
action, relating  to  the  purchase  of  a  single  article  at  a  fixed 
price,  is  within  or  without  the  statute,  is,  of  course,  readily 
determinable,  but  not  so,  when  one  buys  several  articles,  the 
price  or  value  of  each  being  under  the  statutory  limit,  yet 
the  total  amount  exceeding  the  statutory  limit.  As  a  rule, 
each  transaction  must  be  determined  as  fact  according  to  its 
particular  circumstances. 

In  the  leading  case  of  Baldey  v.  Parker,  2  Barn.  &  Cress. 


STATUTE  OF  FRAUDS.  139 

37,  Abbott,  C.  J.,  said,  "  the  defendant  went  into  the  plain- 
tiffs' shop  and  bargained  for  various  articles.  [No  one  article 
was  of  the  value  of  £10,  but  the  amount  of  the  bill  was  £70.] 
Some  were  severed  from  a  larger  bulk,  and  some  he  marked 
in  order  to  satisfy  himself  that  the  same  were  afterwards  sent 
home  to  him.  The  first  question  is,  whether  this  was  one 
entire  contract  for  the  sale  of  all  the  goods.  By  holding 
that  it  was  not,  we  should  entirely  defeat  the  object  of  the 
statute.  For  then  persons  intending  to  buy  many  articles 
at  one  time,  amounting  in  the  whole  to  a  large  price,  might 
withdraw  the  case  from  the  operation  of  the  statute  by 
making  a  separate  bargain  for  each  article.  Looking  at  the 
whole  transaction,  I  am  of  opinion  that  the  parties  must 
be  considered  to  have  made  one  entire  contract  for  the  whole 
of  the  articles."  In  accord  therewith,  see  Garfield  v.  Paris, 
96  U.  S.  557;  Allard  v.  Greasert,  61  K  Y.  1;  Tompkins  v. 
Sheehan,  158  N.  Y.  617;  Weeks  v.  Crie,  94  Me.  458;  Gault 
v.  Brown,  48  1ST.  H.  183;  Brown  v.  Snider,  126  Mich.  198. 
While  some  courts  have  held  that  bids  and  acceptances  at 
auction  of  different  lots  of  goods  are  not  one  transaction 
(Emerson  v.  Heelis,  2  Taunt.  38;  Rugg  v.  Minnett,  11  East, 
218;  Couston  v.  Chapman,  L.  K.  22  H.  L.  Sc.  250;  Robin- 
son v.  Green,  3  Met.  159 ;  Wells  v.  Day,  124  Mass.  38;  Van 
Eps  v.  Schenectady,  12  Johns.  436),  others  have  held  con- 
trariwise, even  though  the  purchases  were  not  all  made  on 
the  same  day.  (Jenness  v.  Wendell,  51  N.  H.  63;  Mills  v. 
Hunt,  17  Wend.  333;  20  Wend.  431;  Thompkins  v.  Haas, 
2  Pa.  St.  74.) 

Evidentiary  requirements :  in  general. —  It  will  be  observed 
that  the  Statute  of  Frauds  relating  to  contracts  to  sell,  and 
to  sales  of,  personal  property,  calls  for  at  least  one  of  the 
following  requirements  in  order  to  be  in  position  to  prove 
the  transaction  between  the  parties:  (1)  a  writing,  sub- 
scribed or  signed  by  the  party  to  be  charged,  as  the  case  may 
be,  or  by  his  lawful  agent;  or  (2)  acceptance  and  receipt 
of  part  of  the  goods,  or  the  evidences,  or  some  of  them,  of 


140  SUMMAKY    OF    SALES. 

the  things  in  action;  or  (3)  part  payment  of  the  purchase 
money.  With  one  exception,  they  may  be  said  not  to  prove, 
but  must  be  a  part  of  the  evidence  adduced  in  order  to  prove 
the  transaction  and  to  avoid  the  objection  interposed  under 
the  statute.  They  will  therefore  be  separately  and  consecu- 
tively considered. 

Writing:  "unless  it."— The  expression  "unless  it  .  .  . 
be  in  writing  "  seems  to  be  peculiar  to  the  former  New  York 
statute,  and  appeared  for  the  first  time  in  the  Laws  of  1897, 
chapter  417.  It  is  not  found  in  the  original  English  statute, 
in  the  Sale  of  Goods  Act,  or  in  the  Uniform  Sales  Act.  Its 
presence  seemingly  added  nothing  to  the  requirements,  al- 
though it  might  be  regarded  as  emphasizing  the  fact  that 
the  agreement  itself  was  not  required  to  be  in  writing,  but 
when  a  writing  is  relied  on  in  satisfaction  of  the  statute,  an 
informal  writing  will  appease  such  evidentiary  requirement. 
If  the  parties  reduce  their  agreement  completely  to  writing 
and  subscribe  the  same,  they  have  more  than  met  the  re- 
quirements of  the  statute,  because  the  writing  is  now  the 
only  evidence  of  their  agreement.  They  may  explain  it,  if 
explanation  is  needed,  but  they  may  not  testify  so  as  to  en- 
large or  to  lessen  its  terms,  with  the  exception  that  an  un- 
disclosed principal  may  be  charged  thereon,  if  the  writing 
be  not  under  seal.  (Higgins  v.  Senior,  8  M.  &  W.  834; 
Briggs  v.  Partridge,  64  N.  Y.  357.)  As  said  by  the  court  in 
Catterlin  v.  Bush,  39  Or.  496,  501,  "  The  memorandum  and 
the  contract  or  agreement  are  not  to  be  confounded  as 
one  and  the  same  thing.  The  memorandum  is  understood 
to  be  a  note  or  minute  informally  made  of  the  agreement, 
which  may  have  but  a  verbal  [oral]  existence,  expressing 
briefly  the  essential  terms,  and  was  never  intended  to  stand 
as  and  for  the  agreement  itself.  The  necessary  elements 
are  that  it  must  contain  the  essential  terms  of  the  contract, 
expressed  with  such  a  degree  of  certainty  that  it  may  be 
understood  without  recourse  to  parol  evidence  to  show  the 
intention  of  the  parties.  Mere  formal  or  non-essential  terms 


STATUTE  OF  FKAUDS.  141 

will  be  implied,  but  the  elements  necessary  to  a  completed 
contract  must  be  intelligently  expressed,  though  ever  so 
briefly." 

"  Or  some  note  or  memorandum." — Where  the  parties 
have  reduced  their  agreement  completely  to  writing,  an 
action  brought  to  enforce  it  is  brought  on  the  written  agree- 
ment. Where,  however,  they  have  not  reduced  their  agree- 
ment completely  to  writing,  but  have  made  only  "  some  note 
or  memorandum  thereof,"  and  have  not  otherwise  by  accept- 
ance and  receipt  or  by  part  payment  met  the  requirements 
of  the  statute,  an  action  to  enforce  is  brought  not  on  the  note 
or  memorandum,  but  on  the  oral  agreement  which  can  be 
established  only  by  the  production  of  a  proper  note  or  memo- 
randum, not  because  the  note  or  memorandum  is  the  agree- 
ment, but  because  it  is  now  the  only  proper  evidence  thereof. 
In  Bird  v.  Munroe,  66  Me.  337,  341,  the  court  said,  "  The 
point  raised  is,  whether,  in  view  of  the  statute  of  frauds,  the 
writing  in  this  case  shall  be  considered  as  constituting  the 
contract  itself  or  at  any  rate  any  substantial  portion  of  it, 
or  whether  it  may  be  regarded  as  merely  the  necessary  legal 
evidence  by  means  of  which  the  prior  unwritten  contract 
may  be  proved.  In  other  words,  is  the  writing  the  contract, 
or  only  evidence  of  it ;  we  incline  to  the  latter  view. 

"  The  peculiar  wording  of  the  statute  presents  a  strong 
argument  for  such  a  determination.  ...  In  the  first 
place,  the  statute  does  not  go  to  all  contracts  of  sale,  but  only 
to  those  where  the  price  is  over  a  certain  sum.  Then,  the 
requirement  of  the  statute  is  in  the  alternative.  The  con- 
tract need  not  be  evidenced  by  writing  at  all,  provided  *  the 
purchaser  accepts  and  receives  a  part  of  the  goods,  or  gives 
something  in  earnest  to  bind  the  bargain  or  in  part  payment 
thereof.'  If  any  one  of  these  circumstances  will  as  effectu- 
ally perfect  the  sale  as  a  writing  would,  it  is  not  easily  seen 
how  the  writing  can  actually  constitute  the  contract,  merely 
because  a  writing  happens  to  exist.  It  could  not  with  any 
correctness  be  said,  that  anything  given  in  earnest  to  bind  a 


142  SUMMARY  OF  SALES. 

bargain  was  a  substantial  part  of  the  bargain  itself,  or  any- 
thing more  than  a  particular  mode  of  proof.  Then,  it  is 
not  the  contract  that  is  required  to  be  in  writing,  but  only 
1  some  note  or  memorandum  thereof.' ' 

Memorandum:  when  to  be  made. — The  statute  does  not 
prescribe  when  the  note  or  memorandum  must  be  made.  In 
England,  it  is  held  that  it  must  be  made  before  action 
brought.  In  Bill  v.  Bament,  9  M.  &  W.  36,  Parker,  B., 
says :  "  There  must,  in  order  to  sustain  the  action,  be  a  good 
contract  in  existence  at  the  time  of  action  brought;  and  to 
make  it  a  good  contract  under  the  statute,  there  must  be  one 
of  the  three  requisites  therein  mentioned.  I  think,  therefore, 
that  a  written  memorandum,  .  .  .  after  action  brought, 
is  not  sufficient  to  satisfy  the  statute."  To  the  same  effect 
see  Webster  v.  Zielly,  52  Barb.  482;  Lucas  v.  Dixon,  22 
Q.  B.  Div.  357 ;  Bird  v.  Munroe,  66  Me.  337.  Contra,  see 
Remington  v.  Linthicum,  14  Peters,  84,  92. 

Memorandum:  consists  of  what. — The  note  or  memoran- 
dum required  in  the  alternative  by  the  statute  may  consist 
of  one  or  more  pieces  of  paper  written  at  the  time  of  the 
bargain,  or  later,  or  at  different  times,  but  "  the  parties  can- 
not unite  two  papers,  so  as  to  make  them  unitedly  constitute 
a  valid  contract,  unless  they  are  physically  joined,  or  the 
intention  to  unite  them  appears  on  the  face  of  the  papers. 
If  the  connection  between  two  papers  depends  upon  verbal 
[oral]  testimony,  or  if  the  reference  in  the  written  memoran- 
dum is  to  something  verbal  [oral],  the  whole  evil  intended 
to  be  remedied  by  statute  will  be  experienced."  (Wright  v. 
Weeks,  25  1ST.  Y.  153,  160.)  That  is,  "  the  two  papers  must 
have  been  so  physically  united,  or  such  reference  made  by 
one  of  them  to  the  other,  that  they  may  be  construed  together 
as  one  instrument  without  the  aid  of  oral  evidence."  (Coe 
v.  Tough,  116  N.  Y.  273,  277.)  See,  also,  Doughty  v.  Man. 
Brass  Co.,  101  K  Y.  644. 

Memorandum :  contents  of. — "  The  whole  current  of  au- 
thority in  this  state  is  that  the  memorandum  must  contain 


STATUTE  OF  FBAUDS.  143 

substantially  the  whole  agreement,  and  all  its  material  terms 
and  conditions,  so  that  one  reading  it  can  understand  from 
it  what  the  agreement  is.  ... 

"  It  must  be  such  that  when  it  is  produced  in  evidence  it 
will  inform  the  court  or  jury  of  the  essential  facts  set  forth 
in  the  pleading,  and  which  go  to  make  a  valid  contract. 

"  Such  essentials  must  appear  without  the  aid  of  parol 
proof,  either  from  the  memorandum  itself  or  from  a  refer- 
ence therein  to  some  other  writing  or  thing,  and  such  es- 
sentials to  make  a  complete  agreement  must  consist  of  the 
subject-matter  of  the  sale,  the  terms  and  the  names,  or  a 
description  of  the  parties."  (Mentz  v.  Newwitter,  122 
N.  Y.  491,  497.)  See,  also,  Calkins  v.  Folk,  1  Abb.  Ct.  of 
App.  291 ;  Drake  v.  Seaman,  97  N.  Y.  230 ;  Butler  v.  Thom- 
son, 92  U.  S.  412 ;  7.  Frank  &  Co.  v.  Eltringham,  65  Miss. 
281. 

In  his  text  on  Sales  (2d  ed.),  37,  Professor  Burdick  says: 
"  The  statutory  requirement  of  a  written  note  has  for  its 
purpose  the  prevention  of  mistakes  or  falsehoods  as  to  the 
terms  of  the  bargain.  It  seems  clear,  therefore,  that  the 
writing  should  contain  all  of  the  terms.  It  should  identify 
the  parties  and  show  the  relationship  of  seller  and  buyer; 
it  should  identify  the  property  bargained  for  (Waterman  v. 
Meigs,  4  Gush.  497;  Doherty  v.  Hill,  144  Mass.  465;  Mac- 
donald  v.  Longbottom,  1  E.  &  E.  977) ;  and  it  should  specify 
the  price  and  terms  of  payment,  if  these  have  been  fixed  by 
the  parties,  as  well  as  all  the  terms  of  the  contract.  Upon 
the  first  and  second  points  there  is  substantial  agreement. 
The  only  difference  of  opinion  relates  to  the  question 
whether,  if  the  writing  does  not  disclose  the  seller,  parol 
evidence  is  admissible  to  show  which  party  was  the  owner  of 
the  property  when  the  bargain  was  made.  (Newell  v.  Rod- 
ford,  L.  R.  3  C.  P.  52;  Frank  v.  Eltringham,  65  Miss. 
281.)" 

In  Mason  v.  Decker,  72  N.  Y.  595,  598,  the  name  of  the 
seller,  but  not  his  agreement,  appeared  in  the  memorandum, 
and  the  court  said :  "  The  agreement  of  the  seller  to  sell 


144  SUMMARY  OF  SALES. 

need  not  be  in  the  paper  signed  by  the  purchaser.  If  the 
purchaser  signs  an  agreement  to  buy,  and  delivers  it  to  the 
seller,  and  he  agrees  by  parol  to  sell  upon  the  terms  men- 
tioned in  the  paper  signed  by  the  purchaser,  there  is  a  bind- 
ing agreement  which  can  be  enforced  against  the  purchaser." 

"And  subscribed "  or  "  signed." — "  The  old  statute  of 
frauds  [in  New  York],  passed  February  26,  1787,  as  well 
as  the  British  statute  of  29  Charles,  2,  ch.  3  were  substan- 
tially in  the  same  words,  with  the  exception  of  the  word 
*  subscribed.'  (1  Kev.  L.  of  1813,  p.  79,  sec.  15;  1  Chit,  on 
Con.  385.)  Those  statutes  required  the  note  or  memoran- 
dum of  the  contract  to  be  signed  by  the  parties  instead  of 
being  subscribed  by  them.  Under  the  judicial  construction 
of  our  old  statute  and  of  the  British  statute,  it  was  not 
necessary  to  the  validity  of  the  contract  or  of  the  note  or 
memorandum  thereof,  that  it  should  be  signed  underneath 
or  at  the  end.  It  was  held  to  be  a  compliance  with  the  stat- 
ute, if  the  name  of  the  party  to  be  charged  appeared  in  any 
part  of  the  instrument,  either  at  the  top,  in  the  middle,  or 
at  the  bottom,  provided  it  was  placed  there  by  the  party 
himself  or  by  his  authority,  and  was  applicable  to  the  whole 
substance  of  the  writing.  (Clason  v.  Bailey,  14  John.  486; 
12  John.  106,  107.)  Thus  the  law  stood  at  the  time  of  the 
revision  [and  now,  ~N.  Y.  Personal  Prop.  Law,  §  31].  The 
revisers,  in  their  notes  to  the  8th  section  of  the  1st  title  of 
the  chapter  of  frauds  as  reported  by  them,  say  it  had  been 
held,  under  the  former  statute  of  frauds,  '  that  the  literal 
act  of  signing  is  not  necessary,  although  the  statute  speaks 
of  signing.  After  setting  out  with  this  principle,  the  courts 
found  themselves  perfectly  at  large  as  to  what  should  be 
considered  a  signing.  To  prevent  difficulties  of  this  sort 
hereafter,  the  revisers  propose  to  require  that  these  agree- 
ments shall  be  subscribed/  The  revisers,  at  the  end  of  the 
3d  section  of  the  2d  title,  which  relates  to  contracts  for  the 
sale  of  goods,  and  in  which  they  also  substituted  the  word 
'subscribed'  for  the  word  '  signed,'  refer  to  their  notes  to 


STATUTE  OF  FBAUDS.  145 

the  preceding  sections.  The  note  to  the  8th  section  of  the 
1st  title,  is  a  plain  expression  of  their  understanding  of  the 
meaning  of  the  word  t  subscribed ' ;  and  a  clear  manifesta- 
tion of  their  intention  in  recommending  its  substitution  for 
the  word  '  signed.'  It  is  perfectly  clear  from  the  note  of  the 
revisers,  that  they  intended  by  the  word  '  subscribed/  to  re- 
quire the  manual  signing  of  the  agreement  at  the  end  thereof, 
by  the  party  to  be  charged.  When  the  members  of  the 
legislature  passed  upon  the  sections  of  the  chapter  of  frauds 
as  reported  by  the  revisers,  they  had  their  notes  before  them, 
defining  the  meaning  of  the  word  '  subscribed,'  and  in  sub- 
stance declaring  that  the  adoption  of  that  word  would  re- 
quire an  actual  manual  subscription  at  the  end  of  the  note 
or  memorandum  of  the  contract.  The  legislature  under  these 
circumstances  retaining  the  word  '  subscribed,'  as  proposed 
by  the  revisers,  must  be  understood  to  have  done  so,  for  the 
purpose  of  requiring  an  actual  signing  in  writing  of  the 
agreement  or  memorandum  thereof,  underneath  the  same. 
We  cannot  now  so  construe  these  sections  of  the  chapter 
of  frauds,  as  to  dispense  with  the  necessity  of  an  actual 
subscription,  without  disregarding  the  plainly  declared  will 
of  the  legislature."  (James  v.  Patten,  6  N.  Y.  9,  11.) 

It  will  be  observed  that  the  English  Sale  of  Goods  Act 
(§4)  still  clings  to  the  word  "  signed,"  and  the  same  word 
is  unfortunately  used  in  the  American  Uniform  Sales  Act 
(§4). 

"  By  the  party  to  be  charged  therewith." — The  signing 
or  subscription  requirement  has  been  liberally  construed  by 
the  courts  in  order  to  carry  out  the  intention  of  the  parties. 
The  signature  may  consist  of  the  first  name  only  (Walker  v. 
Walker,  175  Mass.  349),  of  the  full  name,  of  the  initials 
(Sweet  v.  Lee,  3  M.  &  G.  542;  Caton  v.  Caton,  L.  K.  2 
H.  L.  C.  127;  Merchant's  Bank  v.  Spicer,  6  Wend.  443; 
Palmer  v.  Stephens,  1  Denio,  478;  Sanborn  v.  Flagler,  9 
Allen,  474),  of  a  mark  or  code  sign  (Baker  v.  Dening,  8 
A.  &  E.  94;  Brown  v.  Butchers'  Bank,  6  Hill,  443;  Foye  v. 
10 


146  SUMMABY    OF    SALES. 

Patch,  132  Mass.  105),  or  even  of  a  fictitious  name  (Augur 
v.  Couture,  68  Me.  427). 

The  signatures  of  buyer  and  seller  are  not  required  inas- 
much as  "  contracts  may  exist,  which  by  reason  of  the  Stat- 
ute of  Frauds,  could  be  enforced  by  one  party,  although 
they  could  not  be  enforced  by  the  other  party.  The  Statute 
of  Frauds  in  that  respect  throws  a  difficulty  in  the  way  of 
the  evidence.  The  objection  [that  both  parties  have  not 
signed  or  subscribed]  does  not  interfere  with  the  substance 
of  the  contract,  and  it  is  the  negligence  of  the  other  party 
that  he  did  not  take  care  to  obtain  and  preserve  admissible 
evidence  to  enable  himself  also  to  enforce  it."  (Thornton 
v.  Kempster,  5  Taunt.  788.) 

In  New  York,  prior  to  the  enactment  of  the  Personal 
Property  Law  of  1897,  the  note  or  memorandum  was  re- 
quired to  be  "  subscribed  by  the  parties  to  be  charged 
thereby."  In  Justice  v.  Lang,  42  M".  Y.  493,  500,  Lott,  J., 
said :  "  It  is  claimed  by  the  defendants,  and  it  was  so  held 
by  the  General  Term,  that  the  omission  of  the  plaintiff  to 
subscribe  the  contract  rendered  it  void,  even  as  to  the  defend- 
ants, by  whom  it  was  subscribed,  and  consequently  that  it 
was  wholly  inoperative  and  ineffectual  for  any  purpose  or  to 
any  extent  whatever.  Is  this  the  proper  construction  of  the 
statutory  provision? 

"  In  deciding  this  question  it  is  important  to  consider  the 
object  of  the  statute.  That  is  declared  in  the  act  of  26th 
February,  1787.  It  is  entitled  'An  act  for  the  prevention 
of  frauds ' ;  and  after  making  several  enactments,  it  enacts 
(as  stated  in  the  beginning  of  section  9)  '  for  the  prevention 
of  many  fraudulent  practices  which  are  commonly  en- 
deavored to  be  upheld  by  perjury  and  subornation  of  per- 
jury/ several  provisions,  and,  among  others,  the  fifteenth 
section  [that  the  note  or  memorandum  must  be  'signed  by 
the  parties  to  be  charged  by  such  contract ']  above  cited. 

"  The  present  statute  on  the  subject  [1  K.  S.  136,  §  3] 
is  confessedly  for  the  same  purpose.  The  enactment  that 
every  contract  for  the  sale  of  any  goods  for  the  price  of  fifty 


STATUTE  OF  FRAUDS.  147 

dollars  or  more,  where  the  buyer  neither  accepts  or  receives 
a  part  of  them,  nor  at  the  time  pays  some  part  of  the  pur- 
chase money,  shall  be  void  '  unless  a  note  or  memorandum 
of  such  contract  be  made  in  writing,  and  be  subscribed  by 
the  parties  to  be  charged  thereby,'  does  not  make  such  a 
contract  unlawful,  but  its  object  is  to  declare  that  it  shall 
be  of  no  binding  force  to  charge  any  party  who  has  not  sub- 
scribed a  note  or  memorandum  thereof  in  writing,  with  any 
liability  thereon.  It  evidently  contemplates  legal  proceed- 
ings against  one  of  the  parties  to  it,  and  its  design  is  to 
prevent  perjury  and  subornation  of  perjury,  by  refusing 
the  aid  of  the  law  in  the  enforcement  of  any  rights  claimed 
under  it  against  him,  without  such  written  evidence. 

"  The  end  and  object  of  the  statute  are  attained  by  written 
proof  of  the  obligation  of  the  defendant;  he  is  the  party  to 
be  charged  with  a  liability,  dependent  on,  and  resulting  from, 
the  evidence,  and  he  is  intended  to  be  protected  against  the 
dangers  of  false  oral  testimony.  To  say  that  the  plaintiff 
or  the  party  seeking  to  enforce  a  contract  is  himself  a  party 
to  be  charged  therewith  is  a  perversion  of  language. 

"  The  term  '  parties '  in  the  section  quoted  is  used  in 
connection  with  the  words  '  to  be  charged  thereby,'  and  does 
not  necessarily  include,  nor  can  it  be  construed  to  include, 
all  the  parties  to  the  contract.  It  is,  on  the  contrary,  limited 
and  restricted,  by  the  qualifying  words,  to  such  only  of  those 
parties  as  are  bound  or  held  chargeable  and  legally  respon- 
sible on  the  contract,  or  on  account  of  a  liability  created  by 
or  resulting  from  it. 

"  If  it  had  been  intended  to  extend  to,  and  include,  all  of 
the  parties,  those  words  '  to  be  charged  thereby '  would  have 
been  unnecessary  and  superfluous.  The  appropriate  lan- 
guage to  express  such  intention  would  have  been,  that  the 
note  or  memorandum  should  be  subscribed  '  by  all  the  parties 
thereto,'  or  some  general  terms,  without  any  limitation  or 
restriction  to  any  particular  class  or  designation  of  parties. 

"  The  action  of  the  legislature,  moreover,  when  considered 
in  connection  with  the  recommendation  of  the  revisers,  is  in 


148  SUMMARY  OF  SALES. 

harmony  with  and  strongly  confirmatory  of  this  construction. 
That  recommendation  was,  that  the  note  or  memorandum 
should  be  subscribed  by  all  the  parties  thereto ;  and  if  it  had 
been  adopted  there  would  have  been  no  room  for  doubting  as 
to  the  intent  of  the  requirement.  So,  on  the  other  hand,  the 
omission  to  make  the  change  recommended,  and  the  enact- 
ment of  the  provision  by  the  continuance  of  the  phraseology 
and  terms,  '  the  parties  to  be  charged  thereby,'  clearly  indi- 
cate that  the  construction  that  had  been  given  thereto  in 
numerous  cases,  declaring  that  it  was  enough  that  the  note 
or  memorandum  of  the  contract  be  signed  or  subscribed  by 
the  party  to  be  charged,  was  expressive  of  the  true  meaning 
of  those  terms." 

In  the  New  York  Personal  Property  Law  (chap.  41  of  the 
Consolidated  Laws  of  1909,  §  31),  the  word  "party"  was 
used  instead  of  "  parties,"  with  the  limitation  as  before  of 
"  to  be  charged  therewith,"  making  it  even  more  apparent  that 
it  was  not  the  intention  of  the  legislature  to  require  the  note 
or  memorandum  to  be  subscribed  by  all  the  parties  to  the 
transaction,  but  only  "  by  the  party  to  be  charged  therewith," 
that  is  by  the  party  against  whom  a  claim  is  by  action  sought 
to  be  enforced;  and  the  same  word  and  limitation  are  found 
in  sections  4  of  the  Sale  of  Goods  Act,  and  of  the  Uniform 
Sales  Act. 

"  Or  by  his  lawful  agent."— The  statute  of  29  Charles  II., 
c.  3,  required  the  note  or  memorandum  to  be  signed  by  the 
parties  to  be  charged  "  or  their  Agents  thereunto  lawfully 
authorized."  The  wording  of  the  former  New  York  statute 
was  as  in  the  above  title,  while  the  Sale  of  Goods  Act  and 
the  Uniform  Sales  Act  employ  the  expression  "  or  his  agent 
in  that  behalf."  The  statutes  relating  to  transfers,  as  dis- 
tinguished from  contracts  to  transfer,  realty,  require  the 
authority  of  the  agent  to  be  expressed  in  writing,  but  make 
no  such  requirement  as  regards  either  contracts  to  sell,  or 
sales  of,  personalty. 

As  to  who  may  be  agents,  as  to  when  and  under  what 


STATUTE  OF  FBAUDS. 

circumstances  a  principal  will  be  bound  by  the  act  of  one 
who  is  or  who  professes  to  be  his  agent,  and  as  to  when  and 
under  what  circumstances  an  agent  himself  may  be  person- 
ally bound,  are  not  necessary  here  to  be  discussed,  as  these 
questions  are  more  properly  considered  in  connection  with 
the  principles  of  the  law  of  agency.  At  present  we  are  only 
concerned  with  the  signature  to  the  note  or  memorandum  of 
"  the  party  to  be  charged,"  and  that  may  be  made,  of  course, 
by  the  party  himself,  or  by  an  agent  who  is  expressly  author- 
ized to  sign  the  name  in  question,  as  impliedly  he  may,  per- 
haps, be  authorized  to  do,  if  he  be  authorized  to  make  a 
sale  or  a  contract  to  sell,  although  it  seems  to  be  recognized 
that  one  party  to  the  transaction  cannot  act  as  agent  in  order 
to  sign  the  name  of  the  other  party  thereto.  (Farebrother  v. 
Simmons,  5  B.  &  Aid.  333 ;  Wilson  v.  Lewiston  Mill  Co.f 
150  K  Y.  314;  Johnson  v.  Buck,  35  K  J.  Law,  338 ;  Strong 
v.  Dodds,  47  Vt.  348 ;  Boardman  v.  Spooner,  13  Allen,  353.) 

It  is  to  be  observed  that  the  statute  is  satisfied  if  the  name 
of  the  agent  alone  is  subscribed  to  the  note  or  memorandum, 
if  the  principal's  name  appears  therein  as  the  bargaining 
party.  (Butler  v.  Thomson,  92  U.  S.  412.)  Even  if  the 
principal's  name  does  not  appear  in  the  note  or  memorandum 
as  a  bargaining  party,  and  the  note  or  memorandum  is  sub- 
scribed by  the  agent  in  his  own  name,  the  principal  may  be 
bound  thereby,  provided  a  seal  is  not  attached  to  the  paper 
(Briggs  v.  Partridge,  64  N.  Y.  357),  although  the  individ- 
ual whose  name  is  subscribed  and  who  appears  upon  the  face 
of  the  paper  to  be  a  bargaining  party  is  not  relieved  from 
liability.  (Higgins  v.  Senior,  8  M.  &  W.  834.) 

"  If  goods  be  sold  at  public  auction,  and  the  auctioneer,  at 
the  time  of  the  sale,  enters  in  a  sale  book,  a  memorandum 
specifying  the  nature  and  price  of  the  property  sold,  the 
terms  of  the  sale,  the  name  of  the  purchaser,  and  the  name 
of  the  person  on  whose  account  the  sale  was  made,  such 
memorandum  is  equivalent  in  effect  to  a  note  of  the  contract 
or  sale,  subscribed  by  the  party  to  be  charged  therewith." 
(N.  Y.  Personal  Property  Law,  §  31.)  But  he  cannot  make 


150  SUMMARY  OF  SALES. 

the  memorandum  at  a  later  time  without  express  authority 
from  the  purchaser.  (Price  v.  Durin,  56  Barb.  647 ;  Hicks 
v.  Wetmore,  12  Wend.  548;  Schmidt  v.  Quinzel,  55  N.  J. 
Eq.  792;  Horton  v.  McCarty,  53  Me.  394;  Gill  v.  Bicknell, 
2  Cush.  355.)  A  clerk  of  the  auctioneer  may  also  act  for  the 
auctioneer  in  making  such  memorandum.  ( White  v.  Proctor, 
4  Taunt.  209 ;  Mentz  v.  Newwitter,  122  N.  Y.  491 ;  Bent  v. 
Coll,  9  Gray,  397;  Johnson  v.  Buck,  35  N.  J.  Law,  338.) 
Therefore  it  has  been  held  that  a  buyer  may  recall  his  bid 
between  the  fall  of  the  hammer  and  the  making  of  the  memo- 
randum (Pike  v.  Balch,  38  Me.  302 ;  Dunham  v.  Hartman, 
153  Mo.  625),  or  a  seller  may  revoke  the  authority  of  the 
auctioneer.  (Byrne  v.  Fremont  Realty  Co.,  120  App.  Div. 
692.) 

"And  the  buyer  does  not  accept  and  receive  part  of  such 
goods." — Title  to  goods  at  common  law  could  pass  from 
vendor  to  vendee,  even  without  delivery  of  their  physical 
possession.  In  case  the  goods  were  sold  or  were  contracted 
to  be  sold  for  a  certain  sum  or  more,  the  statute  merely 
required  certain  evidence,  theretofore  not  required,  in 
order  to  enforce  the  bargain.  "  It  is  to  be  borne  in 
mind  that,  in  all  cases  where  there  is  no  memorandum 
or  note  in  writing  of  the  bargain,  the  verbal  [oral] 
agreement  of  the  parties  must  be  proved.  The  statute 
does  not  prohibit  verbal  [oral]  contracts.  On  the  con- 
trary, it  presupposes  that  the  terms  of  the  contract  rest 
in  parol  proof,  and  only  requires,  in  addition  to  the  proof  of 
such  verbal  [oral]  agreement,  evidence  of  a  delivery  or  part 
payment  under  it.  It  does  not  therefore  change  the  nature 
of  the  evidence  to  be  offered  in  support  of  the  contract.  It 
merely  renders  it  necessary  for  the  party  claiming  under  it 
to  show  an  additional  fact  in  order  to  make  it  '  good  and 
valid'"  (Marsh  v.  Hyde,  3  Gray,  331,  332),  and  that 
additional  fact,  presently  to  be  considered,  is  acceptance  and 
receipt  of  part  of  the  goods;  not  acceptance  or  receipt,  but 
acceptance  and  receipt.  In  earlier  times,  the  courts  some- 
times confounded  "  acceptance  "  and  "  receipt,"  and  even 


STATUTE  OF  FBAUDS.  151 

used  the  word  "  delivery"  as  the  equivalent  of  both  (Chap- 
lin v.  Rogers,  1  East,  192 ;  Bill  v.  Bament,  9  M.  &  W.  36 ; 
Vincent  v.  Germond,  11  Johns.  283;  Shindler  v.  Houston,  1 
N.  Y.  261;  Denny  v.  Williams,  5  Allen,  1),  but  acceptance 
and  receipt  are  two  distinct  things,  and  are  now  generally 
so  recognized.  "A  purchaser  may  accept  without  receiving, 
and  he  may  receive  without  accepting;  and,  in  order  to 
comply  with  the  statute  of  frauds,  he  must  both  accept  and 
receive."  (Cross  v.  O'Donnell,  44  N.  Y.  661,  664.) 

Acceptance  and  receipt:  time  of. — "The  old  statute  of 
frauds  did  not  specify  the  time  when  either  the  goods  were 
to  be  accepted  and  received,  or  a  part  of  the  purchase  money 
was  to  be  paid.  (1  Eev.  L.  of  1813,  79,  sec.  15.)  The 
chapter  of  frauds,  as  reported  by  the  revisers,  required  as 
well  the  acceptance  and  receipt  of  a  part  of  the  goods,  as  the 
payment  of  a  part  of  the  purchase  money  to  be  at  the  time  of 
the  making  of  the  contract.  The  legislature  struck  out  of 
the  subdivision  as  reported,  in  relation  to  the  acceptance  and 
receipt  of  a  part  of  the  goods,  the  words  '  at  the  time  ' ;  which 
confined  the  acceptance  and  receipt  of  the  goods  to  the  time 
the  contract  was  entered  into.  (See  Report  of  Revisers.) 
This  action  of  the  legislature  is  a  very  clear  indication  of 
their  intention  to  provide  that  a  contract  for  the  sale  of  goods 
for  the  price  of  $50  or  more  should  be  valid,  if  a  part  of  the 
goods  sold  were  accepted  and  received  under  and  in  pursu- 
ance of  the  contract,  although  after  the  time  of  the  making  of 
it.  And  this  is  the  judicial  construction  which  has  been 
given  to  it."  (McKnigU  v.  Dunlop,  5  N.  Y.  537,  542.) 
See,  also,  Jackson  v.  Tupper,  101  N.  Y.  515,  and  sub-section 
1  of  section  4  of  the  Uniform  Sales  Act. 

Although  acceptance  and  receipt  must  concur,  if  they  are 
relied  on  in  satisfaction  of  the  statute,  "  there  is  nothing 
in  the  statute  which  requires  that  the  accepting  and  receiving 
shall  be  at  the  same  time.  Either  may  precede  the  other; 
and,  after  both  have  concurred,  the  statute  has  been  complied 
with  and  the  contract  becomes  operative  and  valid."  (Cross 


152  SUMMARY  OF  SALES. 

v.  O'Vonnell,  44  N.  Y.  661,  664.)  This  is  expressly  pro- 
vided for  in  sub-section  3  of  section  4  of  the  Uniform  Sales 
Act. 

Acceptance  and  receipt :  by  agent. — "A  buyer  may  accept 
and  receive  through  an  agent  expressly  or  impliedly  ap- 
pointed for  that  purpose.  There  is  every  reason  for  holding 
that  a  designated  carrier  may  receive  for  the  buyer,  because 
he  is  expressly  authorized  to  receive,  and  the  act  of  receiving 
is  a  mere  formal  act,  requiring  the  exercise  of  no  discretion. 
But  there  is  no  reason  for  holding  that  the  buyer,  in  such 
case,  intended  to  clothe  the  carrier,  of  whose  agents  he  may 
know  nothing,  with  authority  to  accept  the  goods,  so  as  to 
conclude  him  as  to  their  quality,  and  bind  him  to  take  them 
as  a  compliance  with  a  contract  of  which  such  agents  can 
know  nothing."  (Allard  v.  Greasert,  61  N.  Y.  1,  5.) 

Acceptance. — Acceptance  may  be  said  to  involve  a  mental 
operation  rather  than  an  act,  although  an  act  may  be  relied 
on  to  establish  the  mental  operation.  It  is  the  assent  of  the. 
buyer  that  he  is,  or  is  to  become,  the  owner  of  the  goods.  It 
looks  to  the  property  in  the  goods,  with  surrender  or  waiver 
of  the  right  of  objection  to  their  quality.  "  To  constitute 
acceptance"  says  Mr.  Browne  (Statute  of  Frauds  [5th  ed.], 
§  316  6),  "  there  must  be  such  conduct  of  the  buyer  in  respect 
to  the  goods  as  affords  evidence  that  he  has  identified  and 
recognized  them  as  the  goods  which  were  to  be  his  by  virtue 
of  the  alleged  contract.  The  burden  of  showing  this  will 
obviously  fall  upon  the  buyer  or  the  seller,  accordingly  as 
the  one  or  the  other  of  them  is  defendant  in  the  action 
(Remick  v.  Sandford,  120  Mass.  309,  316),  but  the  fact 
itself  is  the  same  in  either  case,  and  it  is  also  a  question  of 
what  the  buyer  only  has  done.  (See  Knight  v.  Mann,  118 
Mass.  143.)" 

It  bears  no  relation  to  receipt,  not  even  in  those  tranc- 
actions  in  which  the  agreement  contemplates  delivery  as  a 
prerequisite  to  the  transfer  of  title.  "If  the  contract  be  for 
specified  goods,  the  acceptance  takes  place  at  the  time  of  the 


STATUTE  OF  FBAUDS.  153 

bargain,  and  the  same  evidence  which  proves  the  bargain  will 
also  prove  an  acceptance."  (Langdell,  Cases  on  Sales,  1021.) 
To  the  flame  effect,  »ee  Browne  on  the  Statute  of  Frauds 
(5th  ed.),  §  316  c.  But,  says  Professor  Burdick  (Sales 
[2d  ed.],  75),  "some  additional  act  of  the  buyer  must  be 
shown,  from  which  a  jury,  if  the  evidence  is  conflicting,  or  a 
court,  if  it  is  not,  may  find  that  he  assented  to  the  seller's 
proposal  that  certain  goods  should  be  part  of  the  goods  sold. 
The  buyer  does  such  an  act  when  he  directs  goods,  which  he 
has  inspected  and  approved,  to  be  shipped  to  a  designated 
place,  or  by  a  specified  carrier,"  etc.  In  Cross  v.  O'Donnell, 
44  N.  Y.  661,  the  plaintiffs  agreed  to  sell  24,000  barrel 
hoops,  at  $11.50  per  1,000,  to  the  defendants,  and  to  de- 
liver them  to  a  certain  steamer.  They  so  delivered  them,  in 
order  to  perform  their  agreement,  and  afterwards  the  steamer 
foundered  and  the  cargo  was  lost.  In  an  action  to  recover 
the  price,  the  court  held  that  the  statute  was  satisfied  by 
proof  of  acceptance  and  receipt,  saying,  at  page  664,  "  Here 
the  defendants  accepted  the  hoops.  One  of  them  saw  them  in 
plaintiffs'  yard;  and  the  contract  had  reference  to  this  par- 
ticular lot  of  hoops  which  the  plaintiffs  finally  delivered. 
.  .  .  The  defendants  agreed  to  take  these  identical  hoops, 
and  after  receiving  them  and  thus  fully  complying  with  the 
statute,  they  could  not  reject  them  upon  any  objection  to 
their  quality."  Had  the  defendants  by  telephone  ordered  the 
same  quantity  of  the  same  goods  at  the  same  price,  to  be 
delivered  to  the  same  carrier,  but  had  not  as  yet  approved 
their  quality,  delivery  to  the  carrier  would  satisfy  only  the 
fact  of  receipt  under  the  statute,  under  which  the  fact  of 
acceptance  would  still  remain  to  be  established,  would  still 
remain  a  mental  operation,  to  be  established  only  by  some 
outward  manifestation,  it  is  true,  by  some  act  indicative  of 
ownership  over  the  goods,  and  satisfaction  with  their  quality. 
(Brewster  v.  Taylor,  63  N.  Y.  587;  Fitzsimmons  v.  Wood- 
ruff, 1  T.  &  C.  3.)  The  same  would  be  true  in  cases  of 
appropriation.  (See  Mitchell  v.  Le  Clair,  165  Mass.  308.) 
If  in  either  case,  however,  the  price  were  lower  than  the 


154  SUMMARY  OF  SALES. 

statutory  price,  the  plaintiff  would  be  entitled  to  recover,  on 
proof  that  he  delivered  to  the  designated  carrier,  or  author- 
izedly  appropriated,  the  goods  ordered,  in  full  performance 
of  his  agreement,  and  the  buyer,  under  such  circumstances, 
would  not  be  entitled  to  make  an  objection  to  quality,  because 
the  goods  ordered  were  delivered. 

If  the  defendants  by  telephone  agreed  to  buy  24,000 
specific  barrel  hoops  then  in  plaintiffs'  yard,  at  $11.50  per 
1,000,  and  the  plaintiffs  agreed  to  sell  those  specific  hoops, 
saying  that  they  would  deliver  them  free  of  charge  to  any 
carrier,  then  delivery  as  requested  would  establish  receipt  in 
satisfaction  of  the  statute,  and  what  was  said  over  the  tele- 
phone would  establish  acceptance  in  satisfaction  of  the  stat- 
ute, because  the  transaction  is  now  a  sale,  as  much  so  as  if 
the  parties  stood  in  the  immediate  presence  of  each  other 
and  of  the  specific  goods,  and  assented  to  the  transfer  of  the 
property  therein. 

Therefore,  in  case  of  a  sale,  the  same  evidence  that  estab- 
lishes assent  to  the  transfer  of  title  may  establish  also  the 
additional  fact  of  acceptance  under  the  statute,  if  the  sale 
happens  to  be  within  the  statute,  but  the  additional  fact  of 
receipt  of  possession,  not  required  by  a  common-law  sale,  but 
under  certain  circumstances  required  by  statute,  must  be 
additionally  established.  In  case  of  a  contract  to  sell  a 
specific  chattel  or  chattels,  which  the  buyer  has  already  spe- 
cifically approved,  evidence  of  such  prior  approval  will 
establish  acceptance  in  satisfaction  of  the  statute  (Cross  v. 
O'Donnell,  44  N.  Y.  661),  although  title  may  not  pass  until 
delivery,  or,  in  some  jurisdictions,  tender  of  delivery,  nor 
will  the  additional  fact  of  receipt  of  possession,  if  the  case 
is  within  the  statute,  be  established,  until  proof  of  parting 
with  control  by  the  seller  and  assumption  thereof  by  the 
buyer.  But  in  case  of  a  contract  to  sell  future  goods,  proof 
of  full  performance  of  the  contract  by  the  seller,  whether  it 
involve  delivery  of  possession  to  a  designated  carrier  or  an 
authorized  appropriation  of  the  goods  to  the  contract,  will 
prove  only  the  fact  of  receipt  of  possession  under  the  statute, 


STATUTE  OF  FBAUDS.  155 

and  will  not  prove  thereunder  the  fact  of  acceptance  (Cross 
v.  O'Donnell,  44  N.  Y.  661  j  Mitchell  v.  LeClair,  165  Mass. 
308),  which  must  be  additionally  established,  the  buyer,  by 
virtue  of  the  statute,  being  now  in  position  to  object  to  the 
quality,  whether  it  is  or  is  not  in  accord  with  his  order. 

"After  the  buyer  has  come  into  possession  of  the  goods, 
his  acceptance  of  them  may  be  found  from  the  fact  of  his 
subsequently  so  dealing  with  them  as  to  involve  an  admission 
that  they  are  the  goods  bought  by  him."  (Browne  on  the 
Statute  of  Frauds  [5th  ed.],  §  316  /.)  See  Morton  v.  Tibbett, 
15  Q.  B.  428.  "Again,  after  the  buyer  has  come  into  the 
possession  of  the  goods,  his  acceptance  of  them  may  be  in- 
ferred from  his  continued  and  unexplained  retention  of  them, 
though  no  affirmative  act  of  acceptance  or  identification 
appear  "  (Browne  on  the  Statute  of  Frauds  [5th  ed.],  §  316 
g),  beyond  the  unexplained  act  of  retention. 

Receipt. —  The  word  "  receipt  "  is  seemingly  of  less  doubt- 
ful significance,  and  may  be  said  to  relate  to  the  transfer  of 
the  possession  of  the  goods  as  distinguished  from  the  trans- 
fer of  the  property  in  the  goods.  "  The  actual  receipt 
of  the  goods  does  not  necessarily  involve  manual  taking 
possession  of  them  by  the  buyer.  In  many  cases  this  would 
be  impracticable,  and  no  other  receipt  is  required  than  such 
as  is  consistent  with  the  nature,  locality,  and  condition  of  the 
goods;  though  this  be  merely  symbolical,  the  statute  will  be 
satisfied  when  the  case  admits  of  none  other.  It  is,  there- 
fore, a  general  rule  in  regard  to  the  actual  receipt  of  inac- 
cessible, or  ponderous,  or  bulky  articles,  that  it  may  be 
accomplished  by  the  performance  of  any  act  which  shows 
that  the  seller  has  parted  with  the  right  to  control  the  prop- 
erty, and  that  the  purchaser  has  acquired  that  right." 
(Browne  on  the  Statute  of  Frauds  [5th  ed.],  §  318.) 

Although  the  former  New  York  statute  used  the  word 
"  receive,"  and  the  English  statutes  and  the  Uniform  Sales 
Act  use  the  expression  "  actually  receive,"  New  York  courts 
have  sometimes  construed  the  statute,  with  regard  thereto, 
with,  perhaps,  greater  strictness  than  other  jurisdictions. 


156  SUMMARY  OF  SALES. 

In  Shindler  v.  Houston,  1  N".  Y.  261,  266,  plaintiff  and 
defendant  having  agreed  upon  the  purchase  and  sale  of  a 
specific  pile  of  lumber  for  $52.51,  the  plaintiff  said  to  the 
defendant,  "  the  lumber  is  yours."  There  was  no  note  or 
memorandum  of  the  sale,  nor  part  payment  of  the  price. 
In  an  action  for  the  price,  it  was  contended  that  as  there  was 
no  receipt  and  acceptance  the  statute  applied,  and  the  plain- 
tiff was  not  entitled  to  recover.  Bronson,  J.,  said:  "If 
we  assume  that  the  sale  was  in  all  other  respects  complete, 
the  difficulty  still  remains  that  there  was  no  delivery  of  the 
goods.  Nothing  was  done.  As  was  very  justly  remarked 
by  the  defendant's  counsel,  there  was  nothing  but  mere 
words;  and  the  statute  plainly  requires  something  more; 
it  calls  for  acts.  (Per  Cowen,  J.,  in  Archer  v.  Zeh,  5  Hill, 
2-05.)  .  .  .  Mere  words  of  contract,  unaccompanied  by 
any  act,  cannot  amount  to  a  delivery.  To  hold  otherwise 
would  be  repealing  the  statute. 

"  There  may  be  a  delivery  without  handling  the  property, 
or  changing  its  position.  But  that  is  only  where  the  seller 
does  an  act  by  which  he  relinquishes  his  dominion  over  the 
property,  and  puts  it  in  the  power  of  the  buyer;  as  by 
delivering  the  key  of  the  warehouse  in  which  the  goods  are 
deposited,  or  directing  a  bailee  of  the  goods  to  deliver  them 
to  the  buyer,  with  the  assent  of  the  bailee  to  hold  the  prop- 
erty for  the  new  owner.  In  such  case  there  is,  in  addition  to 
the  words  of  bargain,  an  act  by  which  the  dominion  over  the 
goods  is  transferred  from  the  seller  to  the  buyer.  Here 
there  was  no  delivery  either  actual  or  symbolical." 

In  the  same  case,  at  page  268,  Wright,  J.,  said:  "  Far  as 
the  doctrine  of  constructive  delivery  has  been  sometimes 
carried,  I  have  been  unable  to  find  any  case  that  comes  up 
to  dispensing  with  all  acts  of  parties,  and  rests  wholly  upon 
the  memory  of  witnesses  as  to  the  precise  form  of  words  to 
show  a  delivery  and  receipt  of  the  goods."  But  "  this  state- 
ment," says  Mr.  Browne,  Statute  of  Frauds  (5th  ed.),  §  320, 
"  asserts  a  difference  between  the  testimony  of  witnesses 
as  to  what  the  parties  did  and  what  they  said,  for  the  pur- 


STATUTE  OF  FRAUDS.  157 

pose  of  proving  acceptance  and  receipt,   and  to  give  full 
credence  to  the  former  while  rejecting  the  latter. 

"  That  part  of  the  seventeenth  section  which  mentions 
acceptance  and  receipt  relates  to  the  proof  of  facts  additional 
to  the  making  of  the  bargain,  not  to  new  ways  of  proving 
them."  And  in  note  1  to  the  same  section,  he  says,  "  an 
examination  of  the  cases  will  show  that  evidence  has  uni- 
formly been  received,  even  in  New  York,  of  the  conduct 
of  the  parties,  i.  e.,  what  they  did  and  said,  without  in  any 
way  discriminating  between  acts  of  doing,  and  acts  of  say- 
ing." 

Assent  of  the  vendor  and  vendee  is  essential  to  receipt. 
Therefore  a  forcible  delivery,  or  a  tender  of  goods  which  the 
vendee  ought  not  refuse  to  receive,  because  they  are  of  the 
kind  and  quality  ordered,  will  not  satisfy  the  requirement  of 
receipt  under  the  statute  (Remick  v.  Sanford,  120  Mass. 
309,  316),  nor  will  forcible  seizure  of  possession  by  the 
vendee  establish  the  fact  of  receipt  in  satisfaction  of  the 
statute  (Baker  v.  Cuyler,  12  Barb.  667 ;  Brand  v.  Focht,  3 
Keyes,  409;  Washington  Ice  Co.  v.  Webster,  62  Me.  341), 
although  it  would  seem  that  in  such  a  case  the  fact  might 
be  established  by  proof  that  the  seller  subsequently  assented 
to  the  wrongful  taking.  (See  Somers  v.  McLaughlin,  57 
Wis.  358,  362.) 

Although  at  common  law  an  authorized  appropriation 
by  the  vendor  of  the  goods  to  the  contract  is  sufficient  to 
transfer  title  therein  to  the  vendee,  but,  if  the  case  is  within 
the  statute,  it  is  insufficient  to  prove  acceptance  (Mitchell  v. 
LeClair,  165  Mass.  308;  Sotham  v.  Weber,  116  Mo.  App. 
104),  "nor  does  it  change  the  possession,  and  thereby  de- 
prive the  vendor  of  his  lien  for  the  price."  (Mitchell  v. 
LeClair,  supra,  at  page  310,  citing  Safford  v.  McDonough, 
120  Mass.  290.)  As  the  vendor  cannot  accept,  neither  can 
he  receive  for  the  vendee,  nor  does  he  in  fact  do  so  when  he 
assents  to  keep  the  goods  for  and  as  the  property  of  the 


158  STJMMABY  OF  SALES. 

vendee,  whether  you  now  characterize  him  as  agent  or  bailee. 
When  the  vendor,  at  the  request  of  the  vendee,  consents  to 
keep  the  goods  for  the  vendee,  without  prior  manual  delivery 
of  possession,  it  is  straining  to  call  him  agent  of  the  vendee 
for  the  purpose  of  receiving  delivery  of  possession  from 
himself  to  himself,  and  there  is  nothing  in  what  they  do 
or  say  at  the  time  to  indicate  any  such  fact,  nor,  if  it  be 
so  regarded,  is  there  the  performance  of  any  act  by  the 
vendor  relating  thereto.  What  is  said  and  done  by  the 
parties  at  the  time,  is  regarded  as  acts  proving  transfer  of 
the  possession  from  vendor  to  vendee  and  from  vendee  to 
vendor  (now  bailee  or  agent,  whichever  it  be),  not  manually 
in  either  transfer,  but  metaphorically,  and  must  be  so  re- 
garded unless  manual  delivery  of  possession  be  accepted  in 
all  cases  as  a  sine  qua,  non  to  effect  receipt  under  the  statute, 
which  is  not  the  case,  not  even  in  New  York  as  might  seem 
to  follow  from  a  statement  in  Shindler  v.  Houston,  1  N.  Y. 
261,  266,  that  something  more  than  mere  words  must  be 
shown,  for  "  an  examination  of  the  cases  will  show  that 
evidence  has  uniformly  been  received,  even  in  New  York, 
of  the  conduct  of  the  parties,  i.  e.,  what  they  did  and  said, 
without  discriminating  between  acts  of  doing,  and  acts  of 
saying."  (Browne,  Statute  of  Frauds  [5th  ed.],  §  320, 
note  1.)  It  must  be  shown  from  what  the  parties  did  and 
said  at  the  time  that  there  were  such  metaphorical  transfers 
of  possession,  and  these  are  treated  as  the  equivalent  of 
actual  transfers  of  possession,  and  that  the  possession  of 
the  vendor  as  vendor  has  ceased  and  is  replaced  by  his  pos- 
session as  bailee  or  agent,  as  the  case  may  be,  divested  of 
any  lien  thereon  for  the  price,  if  he  be  an  unpaid  vendor. 
(Bill  v.  Bament,  9  M.  &  W.  36 ;  Lillywhite  v.  Devereux, 
15  M.  &  W.  285;  Mitchell  v.  LeClair,  165  Mass.  308.) 
Professor  Williston's  views  hereon  (Sales,  §  91)  are  seem- 
ingly not  in  accord.  He  apparently  considers  but  one  trans- 
fer of  possession,  viz.,  from  the  vendor  to  himself.  Such, 
however,  is  not  the  fact.  There  are  two  transfers  of  pos- 
session, not  merely  one,  and  not  literally,  but  metaphorically, 


STATUTE  OF  FBAUDS.  159 

as  well  from  vendor  to  vendee,  as  from  vendee  to  vendor. 
If  only  one  transfer  of  possession  be  regarded  as  the  fact, 
that  may  be  so  only  by  regarding  the  vendor  as  also  a  co- 
existing third  person,  and  as  assenting  to  and  delivering 
possession  in  his  capacity  as  vendor,  a  party,  to  himself  as 
bailee  or  agent,  a  third  person,  not  a  party,  not  literally, 
because  no  act  is  performed  beyond  the  one  and  unchanged 
act  of  retention,  but  metaphorically.  But  to  regard  the 
vendor  as  combining  in  himself,  at  one  and  the  same  time, 
the  characters  of  a  party  and  of  no  party  to  the  transaction, 
is  unnecessary  as  well  as  in  measure  inconsistent  and  con- 
tradictory. 

If  a  prospective  buyer  has  received  goods,  or  some  of 
them,  for  examination,  and  subsequently  agrees  to  buy  and 
the  seller  to  sell  said  goods,  the  statute  should  be  and  is 
satisfied  as  to  acceptance  and  receipt  (Edan  v.  Dudfield,  1 
Q.  B.  302;  Bristol  v.  Mente,  79  App.  Div.  67,  affirmed 
without  opinion  in  178  N.  Y.  599 ;  Norton  v.  Simonds,  124 
Mass.  19;  Devine  v.  Warner,  75  Conn.  375),  although  some 
decisions  of  the  lower  courts  in  New  York  seem  to  hold  to  the 
contrary.  (Dorsey  v.  Pike,  50  Hun,  534;  Follet  Wool  Co.  v. 
Utica  Trust  Co.,  84  App.  Div.  151;  Linde  v.  Huntington, 
37  Misc.  212.) 

If  the  goods  sold  or  to  be  sold  are  in  the  possession  of  a 
third  person  not  a  party  to  the  sale  transaction,  and  are 
approved  by  the  buyer,  delivery  and  receipt  of  possession 
may  be  effected  by  what  the  three  parties  say  and  do,  indi- 
cating assent  by  all  to  such  third  person  now  holding  the 
goods  as  bailee  or  agent  of  the  buyer.  (Farina  v.  Howe, 
16  M.  &  W.  119;  Townsend  v.  Hargraves,  118  Mass.  325; 
Bassett  v.  Camp,  54  Vt  232.) 

"  Part  of  such  goods." — Acceptance  and  receipt  of  part 
of  the  goods,  however  small  the  part,  even  a  sample,  will 
suffice  to  satisfy  the  statute,  if  the  part  or  sample  is  accepted 
and  received  as  part  of  the  lot  of  goods  sold  or  contracted 
to  be  sold.  (Hinde  v.  Whiteliouse,  7  East,  558;  Brock  v. 


160  SUMMARY  OF  SALES. 

Knower,  37  Hun,  609;  Garfield  v.  Paris,  96  U.  S.  557.) 
If  at  the  time  the  buyer  accepts  and  receives  some  of  the 
goods  he  declines  to  take  any  more,  the  statute  is  not  satis- 
fied as  to  all,  because  the  buyer  does  not  accept  and  receive 
some  as  a  part  of  the  lot.  The  transaction  is  simply  a  new 
and  different  transaction.  (Atherton  v.  Newhall,  123  Mass. 
141.)  But  if  he  accepts  and  receives  some  of  the  goods, 
without  so  declining,  after  the  rest  of  the  lot  has  been 
destroyed,  it  has  been  held  a  satisfaction  as  to  the  entire 
lot,  with  liability  therefor  pursuant  to  contract.  (See  Vin- 
cent v.  Germond,  11  Johns.  283;  Townsend  v.  Hargraves, 
118  Mass.  325;  Goddard  v.  Demerritt,  48  Me.  211.  But, 
also  see,  Rogers  v.  Phillips,  40  N.  Y.  519.) 

"  Or  the  evidences,  or  some  of  them,  of  such  things  in 
action." — "  Most  of  the  statutes  which  specifically  include 
choses  in  action  within  the  statute  also  mention  acceptance 
and  actual  receipt  of  the  evidences  of  the  choses  in  action 
as  a  method  of  satisfying  the  statute,  but  even  where  evi- 
dences of  the  choses  in  action  are  not  mentioned  there  can 
be  no  doubt  that  delivery  of  any  document  which  is  cus- 
tomarily regarded  as  representing  the  choses  in  action  would 
be  sufficient.  Thus  the  acceptance  and  receipt  of  a  stock 
certificate  would  satisfy  the  statute  so  far  as  a  contract  to 
sell  stock  is  concerned.  (Berwin  v.  Bolles,  183  Mass.  340.) 
How  far  beyond  the  case  of  a  document  courts  might  go 
is  doubtful.  In  Jones  v.  Reynolds,  120  N.  Y.  213,  a 
model  of  an  invention  as  yet  unpatented  was  delivered,  and 
this  was  held  sufficient  to  satisfy  the  statute  when  the  inven- 
tion was  sold.  In  regard  to  choses  in  action  having  no 
tangible  evidence,  the  method  of  satisfying  the  statute  by 
acceptance  and  actual  receipt  is  not  suitable  and  resort  must 
be  had  to  the  other  methods  prescribed."  (Williston  on 
Sales,  §  95.) 

Acceptance  and  receipt :  "  sale  or  return." —  In  case  of 
"  sale  or  return,"  which  may  include  an  option  in  the 
vendor  to  repurchase  (Williams  v.  Burgess,  10  Adol.  &  E. 


STATUTE  OF  FEAUDS.  161 

499),  or  in  the  vendee  to  resell  (Johnston  v.  Trask,  116 
!N".  Y.  136),  acceptance  and  receipt  by  the  first  vendee  will 
satisfy  the  statute  both  as  to  the  sale  and  as  to  the  return, 
because  the  transaction  "  is  one  entire  contract,  and  not 
two  distinct  contracts."  (Williams  v.  Burgess,  supra.)  If, 
however,  A,  at  the  oral  request  of  B,  purchases  a  chattel 
from  C,  which  B  orally  promises  to  purchase  subsequently 
from  A,  in  the  event  of  A  desiring  to  sell,  acceptance  and 
receipt  of  the  chattel  by  A  from  C  will  not  satisfy  the  statute 
for  a  resale  from  A  to  B,  because  the  contract  for  resale  is 
independent  of  the  first  purchase  by  A.  (Leach  v.  Weil,  129 
App.  Div.  688.) 

"  Or  give  something  in  earnest  to  bind  the  bargain." — 

This  is  not  the  language  of  the  former  New  York  statute 
(Personal  Property  Law,  §  31),  but  of  the  original  English 
statute,  and  is,  with  the  substitution  of  "  contract "  for 
"  bargain,"  the  language  of  the  Sale  of  Goods  Act  (§  4  [1]) 
and  of  the  Uniform  Sales  Act  (§  4  [1]). 

"  The  giving  of  earnest,  however  common  in  ancient 
times,  has  fallen  so  much  into  disuse,  that  the  two  expressions, 
.  .  .  '  give  something  in  earnest '  or  *  in  part  payment/ 
are  often  treated  as  meaning  the  same  thing,  although  the 
language  clearly  intimates  that  the  earnest  is  '  something 
to  bind  the  bargain/  or,  *  the  contract/  whereas  it  is  mani- 
fest there  can  be  no  part  payment  till  after  the  bargain  has 
been  bound,  or  closed.  (See  Howe  v.  Smith,  27  Ch.  D.  at 
101-2.)  Earnest  may  be  money,  or  some  gift  or  token 
(among  the  Romans  usually  a  ring),  given  by  the  buyer  to 
the  seller,  and  accepted  by  the  latter  to  mark  the  final  con- 
clusive assent  of  both  sides  to  the  bargain;  and  this  was 
formerly  a  prevalent  custom  in  England.  (Bracton,  1,  2,  c. 
27.  Examples  are  found  in  Bach  v.  Owen,  5  T.  R.  409, 
and  Goodall  v.  Skelton,  2  H.  Bl.  316,  in  the  former  of  which 
a  halfpenny,  and  in  the  latter  a  shilling,  was  given  in 
earnest  of  the  bargain.) 

".  .  .  The  giving  of  earnest,  and  the  part  payment 
11 


162  SUMMARY  OF  SALES. 

of  the  price,  are  two  facts  independent  of  the  bargain, 
capable  of  proof  by  parol,  and  the  framers  of  the  Statute  of 
Frauds  said  in  effect  that  either  of  them,  if  proven  in  addi- 
tion to  parol  proof  of  the  contract  itself,  is  a  sufficient  safe- 
guard against  fraud  and  perjury  to  render  the  contract  good 
without  a  writing. 

"  The  former  of  these  acts  —  that  of  giving  something  in 
earnest  to  'bind  the  bargain' — has  been  the  subject  of 
only  one  reported  case,  that  of  Blenkinsop  v.  Clayton,  7 
Taunt.  597,  in  which  the  buyer  drew  a  shilling  across  the 
seller's  hand,  and  which  the  witness  called  *  striking  the 
bargain '  according  to  the  custom  of  the  country ;  but  as  the 
buyer  returned  the  coin  to  his  own  pocket,  instead  of  giving 
it  to  the  seller,  the  court  necessarily  held  that  the  statute 
had  not  been  satisfied."  (Benjamin  on  Sales  [5th  Eng.  ed.], 
225.) 

In  this  country,  when  retained  in  a  statute,  "  earnest " 
has  been  regarded  as  synonymous  with  part  payment,  pro- 
vided it  was  given  and  received  as  part  of  the  price,  and  not 
as  forfeiture  to  be  retained  by  a  seller  ready  to  perform. 
(Howe  v.  Hayward,  108  Mass.  54.)  Although  it  has  been 
retained  in  the  Uniform  Sales  Act,  it  is  now  of  no  prac- 
tical use  or  importance. 

"  Nor  (at  the  time)  pay  any  part  of  the  purchase  money." 
— "  The  English  statute  of  frauds,  enacted  in  the  reign  of 
Charles  the  Second,  did  not  require  the  payment,  to  render 
a  contract  for  the  sale  of  goods  valid,  to  be  made  at  the  time 
of  making  the  contract,  neither  did  the  statute  of  this  state 
[N.  Y.],  in  force  prior  to  the  Revised  Statutes.  (1  R.  L.  80, 
§  15.)  The  revisers,  in  their  report  to  the  legislature,  pro- 
vided that  the  memorandum,  the  delivery  and  the  payment 
should  be  made  at  the  time  the  contract  was  made.  But  the 
legislature  modified  the  provision  as  reported,  and  adopted 
it  as  we  now  find  it  in  the  statutes.  The  revisers  deemed 
it  important  that  the  conditions  prescribed  to  render  the 
contract  of  sale  valid,  should  be  complied  with  at  the  time  of 


STATUTE  OF  FKAUDS.  1G3 

making  the  contract.  This  was  an  alteration  of  the  law  as 
it  had  before,  for  more  than  a  century,  existed  in  this  state 
and  in  England,  and  the  attention  of  the  legislature  was  thus 
distinctly  called  to  it.  It  omitted  the  requirement  as  to 
time,  so  far  as  related  to  the  memorandum  and  part  delivery, 
but  retained  it  as  to  the  part  payment.  Effect  must  be 
given  to  this  language.  .  .  .  Payment  afterward  will 
not  do.  The  payment  must  be  made  when  the  contract  is 
made.  Such  is  the  plain  language  of  the  statute.  .  .  ••. 
A  payment  not  made  at  the  time  can  never,  under  any 
circumstances,  satisfy  the  requirement  of  the  statute.  But 
when  a  contract  for  the  sale  of  personal  property,  valid  at 
common  law,  is  made,  and  the  buyer  afterward  pays  ex- 
pressly to  bind  the  contract,  or  when  payment  is  made  the 
parties  then  reaffirm  or  restate  the  terms  of  the  contract, 
and  their  minds  then  meet  so  as  to  make  a  contract,  the 
statute  is  undoubtedly  satisfied.  Such  a  payment  is  made  at 
the  time  of  the  contract,  and  not  afterward."  (Hunter  v. 
Wetsell,  57  N.  Y.  375,  377.)  And  in  Jackson  v.  Tupper, 
101  N".  Y.  515,  519,  the  same  court  said:  "It  is  in  sub- 
stance held  that  payment  subsequently  made,  although  con- 
forming to  the  oral  agreement,  is  insufficient  of  itself  to 
make  the  prior  oral  agreement  valid.  There  must  be  enough 
in  addition  to  the  act  of  payment  to  show,  that  the  terms  of 
the  prior  oral  contract  were  then  in  the  minds  of  the  parties, 
and  were  reaffirmed  by  them,  and  this  being  shown,  a  cause 
of  action  arises,  not  on  the  prior  oral  contract  but  on  the 
new  contract  made  at  the  time  of  the  payment. 

Under  sub-section  1  of  section  4  of  the  Uniform  Sales 
Act,  payment  at  the  time  is  not  required. 

Purchase  money :  in  general. — "  If  the  payment  of  some 
part  of  the  purchase  money  is  depended  upon  as  the  con- 
summation of  the  contract,  the  purchaser  must  have  con- 
curred in  the  act  by  parting  with,  and  the  vendor  by  accept- 
ing, the  purchase  money.  This  seems  very  plain.  The 
section  of  the  statute  employs  the  words  '  purchase  money.' 


164  SUMMARY  OF  SALES. 

But  it  was  said  in  the  case  of  Artcher  v.  Zeh,  5  Hill,  200, 
that  the  statute  '  must  be  taken  in  its  spirit  to  mean  any- 
thing, or  part  of  anything,  given  by  way  of  consideration, 
which  is  money  or  money's  worth.  The  object  was  to  have 
something  pass  between  the  parties  besides  mere  words. 
Some  symbol  like  earnest  money/  "  (Brabin  v.  Hyde,  32  N. 
Y.  519,  523.) 

Purchase  money:  checks. —  In  the  case  of  Hunter  v. 
Wetsell,  57  N.  Y.  375,  it  was  held  that  payments  made 
after  the  conclusion  of  the  bargain  were  insufficient  to  vali- 
date the  contract,  because  when  made  there  was  no  restate- 
ment or  recognition  of  the  essential  terms  of  the  contract. 
The  cause  was  tried  again,  and  on  the  second  appeal,  in 
84  !N".  Y.  549,  553,  the  court  said :  "  In  the  case  as  now 
presented  the  difficulty,  fatal  before,  is  claimed  to  have  been 
obviated.  There  is  proof  of  a  restatement  of  the  essential 
terms  of  the  contract  at  the  time  of  the  delivery  of  the 
check  for  $200.  There  is  proof  also  contradicting  such 
alleged  fact.  The  question  was  left  to  the  jury,  under  a 
charge  from  the  court  which  does  not  seem  to  be  the  subject 
of  complaint,  and  they,  in  rendering  a  verdict  for  the  plain- 
tiffs, necessarily  found  the  fact  of  such  restatement.  That 
finding  is  conclusive  upon  us. 

"  But  it  is  now  objected  that,  conceding  the  fact  of  such 
restatement,  there  was  no  payment  of  any  part  of  the  pur- 
chase money  at  that  time.  It  is  admitted  that  the  check 
was  then  given,  and  it  cannot  be  successfully  denied  that  it 
was  both  delivered  and  received  as  a  payment  upon  the 
contract  price  of  the  hops,  but  it  is  claimed  that  the  check 
was  not,  in  and  of  itself,  payment,  and  having  been  drawn 
upon  a  bank,  could  not  have  been  in  fact  paid  until  after- 
ward, and  so  there  was  no  payment  '  at  the  time '  to  satisfy 
the  requirements  of  the  statute.  It  is  quite  true  that  a 
check,  in  and  of  itself,  is  not  payment,  but  it  may  become 
so  when  accepted  as  such  and  in  due  course  actually  paid. 
While  not  money,  it  is  a  thing  of  value,  and  is  money's 


STATUTE  OF  FRAUDS.  165 

worth  when  drawn  against  an  existing  deposit  which  re- 
mains until  the  check  is  presented.  We  must  assume  that 
the  check  of  the  vendee,  in  this  case,  was  good  when  drawn 
and  was  duly  paid  upon  presentation  in  the  usual  and  regu- 
lar way,  for  it  appears  in  the  possession  of  the  drawers, 
and  they  practically  assert  the  fact  of  its  payment  by  their 
counterclaim  in  the  action,  by  which  they  seek  to  recover 
back  the  money  so  paid.  .  .  It  is  said,  however, 

that  the  actual  payment  of  the  money,  as  distinguished 
from  the  delivery  of  the  check,  was  not  '  at  the  time '  of  the 
contract,  but  at  some  later  period.  We  do  not  know  accu- 
rately when  the  check  was  paid.  It  may  have  been  the  same 
day.  It  may  have  been  within  a  very  few  moments.  It  may 
not  have  been  until  the  next  day.  We  are  not  to  presume, 
for  the  purpose  of  making  the  contract  invalid,  that  it  was 
held  beyond  the  natural  and  ordinary  time.  In  such  event 
it  is  a  very  narrow  construction  to  say  that  the  payment  was 
not  made  at  the  time  of  the  contract.  The  purpose  and 
object  of  the  statute  should  not  be  forgotten.  Its  aim  is  to 
-substitute  some  act  for  mere  words,  to  compel  the  verbal 
[oral]  contract  to  be  accompanied  by  some  fact  not  likely 
to  be  mistaken,  and  so  avoid  the  dangers  of  treacherous 
memory  or  downright  perjury.  The  delivery  of  the  check 
was  such  an  act.  Indeed,  it  would  be  an  entirely  reasonable 
and  just  construction  to  say  that  the  delivery  of  the  check 
and  its  presentment  and  payment  constituted  one  continu- 
ous transaction,  and  should  be  taken  as  such  without  refer- 
ence to  the  ordinary  delay  attendant  upon  turning  the  check 
into  money.  The  statute  does  not  mean  rigorously,  eo 
instanti.  It  does  contemplate  that  the  contract  and  the  pay- 
ment shall  be  at  the  same  time,  in  the  sense  that  they  con- 
stitute parts  of  one  and  the  same  continuous  transaction. 
We  think,  therefore,  there  was  a  payment  '  at  the  time/ 
within  the  meaning  of  the  statute,  and  that  the  contract  of 
sale  was  valid." 

See,  also,  McClure  v.  Sherman,  70  Fed.  Rep.  190;  Logan 
v.  Carroll,  72  Mo.  App.  613. 


166  SUMMARY  OF  SALES. 

Purchase  money :  bills  and  notes. — "  The  delivery  of  a 
bill  of  exchange  or  promissory  note  on  account  or  in  payment 
of  the  price  of  goods  sold  under  a  parol  contract,  is  said,  in 
some  of  the  elementary  works,  to  take  a  case  out  of  the 
statute.  (Chit,  on  Con.  397;  10  Petersd.  Ab.  128,  note.) 
Chitty  adds  as  a  reason,  that  such  instrument  amounts  to 
payment,  till  dishonored,  and  cites  Chitty  on  Bills  (7th 
ed.),  97;  id.  (8th  ed.),  80,  note  V,  84.  This  doubtless 
refers  to  a  bill  of  exchange  or  promissory  note  of  a  third 
person,  and  not  of  the  purchaser.  The  delivery  of  the  note 
of  the  purchaser  can  in  no  sense  be  said  to  be  a  payment. 
It  may  suspend  the  right  of  action  of  the  seller,  for  the 
purchase  money,  until  the  maturity  of  the  note,  but  the 
absolute  liability  of  the  purchaser  remains,  j^ot  so,  how- 
ever, in  all  cases  of  the  delivery  of  the  obligation  of  a  third 
person.  That,  when  agreed  to  be  taken  in  satisfaction,  is  an 
absolute  payment,  and  in  all  cases  the  purchaser's  liability 
is  contingent."  (Combs  v.  Bateman,  10  Barb.  573,  575.) 
See,  also,  Ireland  v.  Johnson,  18  Abb.  Pr.  392. 

Purchase  money :  pre-existing  debt. — "  The  payment  may 
be  made  in  money  or  property,  or  in  the  discharge 
of  an  existing  debt,  in  whole  or  in  part,  due  from  the 
vendor  to  the  purchaser.  Or  the  extinguishment  of,  or 
payment  upon,  a  promissory  note  held  by  the  latter  against 
the  former.  A  mere  agreement  to  apply  the  purchase  money 
to  either  of  these  objects,  would  not  be  enough,  because  the 
contract  would  still  rest  in  words,  and  nothing  more.  The 
agreement  to  pay  the  note  or  satisfy  the  debt  must  be  con- 
summated and  carried  into  effect  by  an  act  which  shall  be 
obligatory  upon  the  purchaser  and  enable  the  vendor  to 
enforce  the  contract  of  sale.  The  note  should  be  delivered 
up  and  canceled;  or,  if  the  purchase  money  falls  short  of 
complete  payment,  it  should  be  extinguished  by  an  endorse- 
ment made  upon  it  in  writing  which  shall  operate  effectually 
as  an  extinguishment  pro  tanto.  And  if  the  purchase  money 
is  to  be  applied  to  pay  an  open  account,  in  whole  or  in  part, 


STATUTE  OF  FBAUDS.  167 

the  creditor  and  purchaser  should  part  with  some  written 
evidence  of  such  application  which  shall  bind  him  and  put 
it  into  the  power  of  his  debtor  and  vendor  to  enforce  the 
contract.  Without  this,  or  something  like  this,  the  contract 
is  a  mere  collection  of  words,  and  the  statute  is  evaded." 
(Brdbin  v.  Hyde,  32  N.  Y.  519,  523.)  "  This,"  says  Pro- 
fessor Williston  (Sales,  §  98),  "leads  to  the  rather  curious 
result  that  though  as  a  matter  of  common  law  the  whole 
price  has  been  paid  by  the  cancellation  of  an  indebtedness, 
there  has  not  been  any  part  payment  within  the  statute, 
because  the  satisfaction  of  the  price  is  effected  wholly  by 
parol.  The  statute  puts  no  limitation  on  the  way  that  the 
price  should  be  paid,  and  it  seems  an  unnecessary  piece  of 
judicial  legislation  for  courts  to  make  the  requirements  of 
the  statute  more  stringent  than  the  Legislature  has  done. 
This  might  be  expected  of  New  York,  in  view  of  the  rule 
laid  down  by  the  courts  of  that  State  in  regard  to  acceptance 
and  receipt  [referring  to  Shindler  v.  Houston,  1  N.  Y.  261, 
in  which  Bronson,  J.,  at  page  266,  said :  '  Mere  words  of 
contract,  unaccompanied  by  any  act,  cannot  amount  to  a 
delivery.  To  hold  otherwise  would  be  repealing  the  stat- 
ute'], and  of  other  jurisdictions  which  have  followed  New 
York." 

It  should  be  borne  in  mind,  however,  that  the  core  of  the 
matter  is  not  proof  of  the  extinguishment  of  a  debt  at  com- 
mon law  or  under  a  statute,  but  proof  of  a  sale  transaction 
both  at  common  law  and  under  the  Statute  of  Frauds.  The 
so-called  "  no  mere  words  "  rule  of  New  York,  which  Pro- 
fessor Williston  characterizes  as  "  an  unnecessary  piece  of 
judicial  legislation,"  is  not,  as  matter  of  fact,  judicial  legis- 
lation at  all.  While  the  statute  does  not  specifically  pre- 
scribe how  the  price  shall  be  paid,  the  purpose  and  intent 
of  the  statute  should  be  observed  by  the  courts,  and  the 
New  York  courts  have  obviously  followed  that  purpose  and 
intent  in  this  particular,  at  least.  Nothing  is  more  obvious 
than  the  fact  that  the  legislature  by  this  statute  intended  to 
supplement  oral  evidence  with  some  other  kind  of  evidence, 


168  SUMMAKY    OF    SALES. 

viz.,  with  writing,  with  acceptance  and  receipt,  or  with  part 
payment.  If  one  or  the  other  of  the  three  enumerated  kinds 
may  be  established  by  oral  evidence,  by  mere  words,  the 
statute  is  clearly  circumvented  and  evaded.  As  pertinently 
remarked  by  the  court  in  Hunter  v.  Wetsell,  84  N.  Y.  549, 
554,  "  the  purpose  and  object  of  the  statute  should  not  be 
forgotten.  Its  aim  is  to  substitute  some  act  for  mere  words, 
to  compel  the  verbal  [oral]  contract  to  be  accompanied  by 
some  fact  not  likely  to  be  mistaken,  and  so  avoid  the  dangers 
of  treacherous  memory  or  downright  perjury."  If  the  plain 
statutory  mandate  is  to  be  disregarded,  the  statute  itself  were 
better  by  its  creator  repealed.  Jurisdictions  allowing  proof 
by  oral  evidence  make  a  nearer  approach  to  judicial  legisla- 
tion, because  they  minimize  the  operation  of  the  statute 
under  the  guise  of  a  liberal  interpretation  not  justified  by 
the  purpose  and  object  of  its  enactment. 

Again,  in  section  95  of  his  valuable  work  on  Sales,  the 
same  learned  author  says :  "  In  regard  to  choses  in  action 
having  no  tangible  evidence,  the  method  of  satisfying  the 
statute  by  acceptance  and  actual  receipt  is  not  suitable  and 
resort  must  be  had  to  the  other  methods  prescribed."  But 
we  might  well  ask  if  acceptance  and  actual  receipt  of  some- 
thing tangible  may  be  proved  by  mere  words,  why  may  they 
not  as  well  be  proved  by  mere  words  of  something  intangible  ? 
If  mere  words  will  accomplish  the  one,  why  not  the  other  ? 
And  if  mere  words  are  not  suitable  to  prove  acceptance  and 
receipt  of  choses  in  action,  by  what  process  of  reasoning 
must  it  be  held  that  mere  words,  without  more,  will  prove 
payment  by  a  chose  in  action,  i.  e.,  the  oral  extinguishment 
of  an  old  debt  as  the  price  of  goods  sold  or  contracted  to  be 
sold? 


PART  V. 

REMEDIES. 

In  general. —  This  part  of  the  subject  naturally  divides 
itself  into  remedies  of  seller  against  buyer,  and  of  buyer 
against  seller,  personal  remedies  which,  under  certain  cir- 
cumstances, may  be  aided  and  secured  by  the  enforcement 
of  concurrent  rights  against  the  goods. 

"  It  will  be  obvious  upon  reflection  that  a  variety  of  con- 
ditions may  arise,  the  chief  among  which  will  perhaps  be 
these : 

"  I.  The  title  has  passed,  and 

(1)  The  goods  have  been  delivered,  or 

(2)  The  goods  still  remain  in  the  possession  of 

the  seller. 
"  II.  The  title  has  not  passed,  and 

(1)  The    possession    has    been    surrendered    tem- 

porarily to  the  buyer,  or 

(2)  The  goods  still  remain  in  the  custody  of  the 

seller."  (Mechem  on  Sales,  §  1652.) 

Seller  vs.  buyer:  price,  where  title  has  passed. —  Where 

title  has  passed,  whether  the  goods  have  or  have  not  been, 
delivered,  tlie  seller  is  entitled  to  recover  the  price  (Marti- 
neau  v.  Kitcliing,  L.  R.  7  Q.  B.  436;  Hayden  v.  Demets, 
53  N".  Y.  426 ;  Mason  v.  Decker,  72  N.  Y.  595 ;  Mitchell  v. 
Le  Clair,  165  Mass.  308 ;  Dor  emus  v.  Howard,  23  N.  J.  Law, 
390;  Uniform  Sales  Act,  §  63  [1]),  for  "where  one  party 
agrees  to  do  a  certain  thing,  and  the  other  party  agrees  to 
pay  a  sum  of  money,  and  the  thing  or  duty  is  performed, 
but  the  other  party  refuses  to  pay  the  money,  an  action  lies 
for  the  money,  because  a  debt  has  accrued,  and  nothing  re- 
mains to  be  done  but  to  pay  it."  (Mitchell  v.  Gile,  12  N". 
H.  390,  391.)  If,  however,  credit  was  given,  and  the  term 
of  credit  has  not  expired  (Keller  v.  Strassburger,  90  N.  Y. 

[169] 


170  SUMMARY  OF  SALES. 

379),  or,  if  payment  was  dependent  upon  some  condition, 
and  the  condition  has  not  been  fulfilled,  the  price  may  not 
be  recovered  until  expiration  of  the  credit,  or  fulfillment 
of  the  condition. 

At  common  law,  but  only  where  title  passed,  the  price 
was  recoverable  under  the  common  indebitatus  counts.  It' 
title  passed,  but  the  goods  had  not  been  delivered,  it  was 
recovered  under  the  count  for  goods  bargained  and  sold ;  but, 
if  title  passed  and  the  goods  had  been  delivered,  it  was 
recovered  under  the  count  for  goods  sold  and  delivered. 
"  Goods  bargained  and  sold  will  not  lie,  said  Littledale, 
J.,  in  Atkinson  v.  Bell,  8  B.  &  C.  277,  "  unless  there  be  a 
sale."  But  "  where  goods  are  sold  and  delivered,  the  mode 
of  recovering  the  price  at  common  law  is  by  an  action  on  the 
common  count,  which  charges  indebtedness  for  goods,  chattels 
and  effects  sold  and  delivered  to  the  defendant  at  his  request. 
To  support  that  action  the  plaintiff  must  prove  delivery.  In 
Outwater  v.  Dodge,  7  Cow.  85,  it  "was  held,  that  where  ji^ 
contract  to  deliver  goods  is  unexecuted  by  a  delivery,  the 
vendor  in  a  suit  for  the  price  must  declare  on  the  special 
contract  and  cannot  recover  upon  a  general  count  for  goods 
sold  and  delivered.  (See,  also,  Bradley  v.  Wheeler,  44  N. 
Y.  495;  Stearns  v.  Washburn,  7  Gray,  189;  Hart  v.  Tyler, 
15  Pick.  171.)"  Butler  Bros.  v.  Hirzel,  87  App.  Div.  462, 
464,  affirmed,  without  opinion,  in  181  K  Y.  520. 

Many  of  our  States  have  followed  the  English  law  in 
holding  that  an  action  for  the  price  is  maintainable  only 
when  title  has  passed.  (Oreenleaf  v.  Hamilton,  94  Me. 
118 ;  Rider  v.  Kelley,  32  Vt.  268 ;  Tufts  v.  Bennett,  163 
Mass.  398;  Unexcelled  Fire-Works  Co.  v.  Polites.  130  Pa. 
St.  536 ;  Am.  Hide  &  Leather  Co.  v.  Chalkley,  101  Va.  458 ; 
McCormick  Machine  Co.  v.  Balfany,  78  Minn.  370.)  The 
reason  therefore  is,  that  "  where  the  title  has  not  passed,  of 
course  the  seller  still  has  the  goods,  and  hence  he  is  not 
damaged  to  the  full  value  of  the  same.  He  can  only  recover, 
in  such  a  case,  whatever  may  be  the  loss  sustained  by  him 


REMEDIES.  171 

on  account  of  the  purchaser's  default.  This  loss,  .  .  ., 
is  the  difference  between  the  price  fixed  by  the  contract,  and 
the  market  value  of  the  goods  at  the  time  and  place  of 
delivery,  as  provided  in  the  contract."  (Ridgley  v.  Mooney, 
16  Ind.  App.  362,  367.) 

"  Where,"  however,  "  under  a  contract  to  sell  or  a  sale,i 
the  price  is  payable  on  a  day  certain,  irrespective  of  delivery 
or  of  transfer  of  title,  and  the  buyer  wrongfully  neglects  or 
refuses  to  pay  such  price,  the  seller  may  maintain  an  action 
for  the  price,  although  the  property  in  the  goods  has  not 
passed,  and  the  goods  have  not  been  appropriated  to  the 
contract.  But  it  shall  be  a  defense  to  such  an  action  that  the 
seller  at  any  time  before  judgment  in  such  action  has  mani- 
fested an  inability  to  perform  the  contract  or  the  sale  on 
his  part  or  an  intention  not  to  perform  it."  (Uniform  Sales 
Act,  §  63  [2].)  Anent  this  provision  of  the  Uniform  Sales 
Act,  expressive  of  the  general  law,  Professor  Williston 
(Sales,  §  575)  says:  "It  is  a  matter  of  construction  in 
every  case  whether  the  price  is  payable  on  a  day  certain, 
irrespective  of  delivery.  The  contract  will  rarely  so  provide 
in  terms,  and  the  proper  construction  must  generally  depend 
upon  the  relative  time  fixed  by  the  contract  for  performance 
on  one  side  or  the  other.  .  .  .  Unless  there  is  ground 
for  a  contrary  supposition,  courts  will  assume  that  the  "pay- 
ment of  the  price  and  the  delivery  of  the  goods  werfl  founded 
to  be  concurrent  acts,  and  the  obligation^  of  ejich^partjr  to 
perform  'will  be  dependent  upon  the  simultaneous  perform- 
ance  by  the  other  party.  Even  though  a  date  be  fixed  for 
the  performance  on  one  side,  and  no  date  fixed  for  the 
counter-performance,  the  same  principle  will  be  applied  un- 
less there  is  something  in  the  contract  or  surrounding  cir- 
cumstances to  show  that  the  performance  for  which  the  time 
was  not  fixed  could  not  in  its  nature  be  given,  or  was  not 
intended  to  be  given  on  the  same  day  as  the  performance 
for  which  the  time  was  fixed.  If,  however,  different  times 
are  fixed  for  the  payment  of  the  price  and  the  delivery  of 
the  goods,  the  general  rule,  undoubtedly,  is  that  adopted 


172  SUMMAEY    OF    SALES. 

from  Lord  Holt's  opinion  in  Thorp  v.  Thorp,  12  Mod.  455, 
that  the  act  which  is  by  the  contract  to  be  performed  first  is 
absolutely  due  on  that  day,  while  the  performance  which  is 
to  take  place  on  a  later  day  is  not  due  unless  as  a  condition 
precedent  the  prior  performance  has  been  rendered." 

Seller  vs.  buyer:  price,  where  title  has  not  passed. — 

Many  States,  however,  have  not  followed  the  English  law 
that  the  price  is  recoverable  only  where  title  has  passed, 
unless  the  price  is  payable  on  a  day  certain,  irrespective  of 
delivery.  "  If  the  reason  why  the  property  in  the  j£oods_ 
has  not  passed  to  the  buyer  is  because  the  buyer  wrong- 
fully refused  to  take  title  when  offered  to  him,  according  to 
the  weight  of  authority,  perhaps,  in  this  country,  the  seller 
may  recover  the  full  purchase  price."  (Williston  on  Sales, 
§  562  and  cases  cited.) 

"  The  common  law  rule  proceeded  upon  the  theory  of  a 
failure  to  prove  the  cause  of  action  alleged  in  the  declara- 
tion, but  now  in  an  action  for  goods  sold  and  delivered,  the 
seller  may  upon  tender  of  performance  upon  his  part  and 
demand  of  payment,  treat  the  property  as  belonging  to  the 
defendant  and  sue  for  a  recovery  of  the  price  agreed  to  be 
paid.  (Mason  v.  Decker,  72  N.  Y.  596.)  He  is  entitled 
to  recover  the  price  when  he  shows  not  only  that  the  pur- 
chaser failed  to  pay,  but  that  he  himself  was  ready  and 
offered  to  deliver  the  goods."  (Butler  Bros.  v.  Hirzel,  87 
App.  Div.  462,  464,  affirmed,  without  opinion,  in  181  N.  Y. 
520.) 

In  Mason  v.  Decker,  72  K  Y.  595,  599,  "  the  plaintiff 
sued  for  and  recovered  the  purchase  price.  He  tendered 
performance  on  his  part,  and  demanded  payment  of  the 
defendant.  In  such  a  case,  it  is  too  well  settled  to  be  longer 
disputed  that  the  plaintiff  could  treat  the  stock  [shares  of 
stock  contracted  to  be  sold]  as  belonging  to  the  defendant, 
and  sue  for  and  recover  the  price  agreed  to  be  paid  for  it. 
(Sedgwick  on  Dam.  [5th  ed.],  333;  3  Parson's  on  Con. 
[5th  ed.],  208;  Des  Arts  v.  Leggett,  16  "N.  Y.  582;  Dustan 


REMEDIES.  173 

v.  Me  Andrew,  44  id.  72.)   jn  this  state,  in  such  a  case,  the 

jjeller  has  the  election  to  consider  the  property  his  own,  the 
buyer  having  forfeited  his  rights  under  the  contract,  or  as 

In  the  former  case  hia  remedy  i» 


to  sue  the  buyer  for  damages  for  not  taking  the  property, 
and  the  measure  of  his  damages  is  the  difference  between  the 
contract  price  and  the  market  price.  In  the  latter  case,  he 
may  have  either  of  two  remedies,  to  wit:  He  may  sell  the 
property,  acting  as  the  agent  of  the  buyer,  and  apply  the 
proceeds  upon  the  purchase  price,  and  sue  for  and  recover 
the  balance,  if  any;  or  he  may  sue  for  and  recover  the  pur- 
chase price.  These  two  remedies  are  both  based  upon  the 
theory  that  the  title  to  the  property  by  the  contract  and 
tender  and  assent  of  the  seller  has  become  vested  in  the 
buyer."  And  in  Hay  den  v.  Demets,  53  N".  Y.  426,  it  was 
"  held  that  the  rule  applied,  not  only  to  cases  where  the  title 
passed  at  once,  but  also  to  cases  where  the  contract  was 
executory  but  there  had  been  a  valid  tender  and  refusal." 
(Van  Brocklen  v.  Smeallie,  140  N.  Y.  70,  75.)  See,  also, 
A  ckerman  v.  Rubens,  167  N.  Y.  405. 

The  case  of  Dustan  v.  McAndrew,  44  N".  Y.  72,  is  the 
leading  case  thereon,  and  the  "  decision  and  the  rule  laid 
down  therein  have  been  very  influential  in  other  jurisdic- 
tions, and  cases  which  refuse  to  confine  the  seller  to  the 
difference  between  the  contract  price  and  the  market  price 
generally  go  back  to  this  New  York  decision  for  their  foun- 
dation. Of  course,  if  the  seller  is  entitled  to  the  price,  the 
buyer  must  be  entitled  to  the  goods.  At  what  moment  the 
title  passes  to  him  is  not  much  discussed  in  the  decisions, 
but  the  statement  of  the  rule  that  the  seller  may  store  or  re- 
tain the  property  for  the  buyer  implies  that  when  the  seller 
deposits  the  goods  with  a  third  person  for  the  buyer,  or  gives 
notice  to  the  buyer  by  suing  for  the  price  or  otherwise,  that 
he  himself  is  holding  the  goods  for  the  buyer,  either  the  title 
thereupon  passes,  or,  what  amounts  to  the  same  thing,  the 
rights  of  the  parties  will  subsequently  be  adjusted  as  if  it 
had  passed  at  that  time.  The  remedy  thus  allowed  is 


174  SUMMARY  OF  SALES. 

neither  more  nor  less  than  specific  performance  of  the  con- 
tract. In  a  court  of  equity  a  contract  for  a  purchase  of  land 
is  enforced  by  a  decree  ordering  the  defendant  to  pay  the 
price  upon  the  transfer  of  title.  In  the  case  of  a  sale  of 
goodTthe  3ffew  Fork  court  and  other  courts  following;  its  rale 
allow  the  seller  by  force  of  his  own  expressed  volition  to  make 
the  buyer  owner  in  spite  of  the  buyer's  dissent,  and  there- 
upon~foTrecover  the  price."  (Williston  on  Sales,  §  563.) 
f  Borne  jurisdictionFTimit  the  application  of  the  rule  to 
j  oases  where  goods  are  made  to  order,  are  not  readily  salable, 
\&nd.  have  no  general  market  value.  (Kinkhead  v.  Lynch, 
132  Fed.  Eep.  692 ;  Gordon  v.  N orris,  49  N.  H.  376 ;  Batten- 
tine  v.  Robinson,  46  Pa.  St.  177 ;  Black  River  Lumber  Co.  v. 
Warner,  93  Mo.  374.)  See,  also,  Uniform  Sales  Act,  §  63 
(3),  and  Williston  on  Sales,  §  583. 

For  a  criticism  of  the  New  York  rule  and  its  limitation, 
see  Williston  on  Sales,  §§  563-574. 

"  In  case  a  vendor  agrees,  by  an  executory  contract,  to 
manufacture  goods,  to  be  delivered  from  time  to  time,  as 
ordered  by  the  vendee,  to  be  paid  for  after  each  successive 
delivery,  and  the  vendee,  after  having  accepted  and  paid 
for  a  part,  gives  notice  that  he  will  not  receive  or  pay  for* 
the  rest,  the  vendor  may  recover  damages  for  the  breach  of 
the  contract  without  manufacturing  or  tendering  the  re- 
mainder of  the  goods.  (Windmuller  v.  Pope,  107  !N".  Y. 
674;  Dingley  v.  Oler,  11  Fed.  Eep.  373;  Ripley  v.  McClure, 
4  Exc.  Rep.  345.)  In  such_a  case  the  vendor  is  not  entitled 
to  elect  between  several  remedies,  as  in  case  of  a  sale  of  goods 
in  existence  and  identified,  or  in  case  goods  are  manufactured 
before  the  contract  is  rescinded,  but  he  is  confined  to  recover- 
ing the  difference  between  the  contract  price  and.  the  actual 
money  value  of  the  property  at  the  time  and  place  appointed 
for  their  delivery.  (Windmuller  v.  Pope,  supra;  Borries  v. 
Hutchinson,  18  C.  B.  [N.  S.]  445.)"  Todd  v.  Gamble,  67 
Hun,  38,  39.  See,  also,  Isaacs  v.  Terry  &  Tench  Co.,  125 
App.  Div.  532,  534,  and  the  Uniform  Sales  Act,  §  64  (4). 


REMEDIES.  175 

Seller  vs.  buyer :  damages — "  In  every  case,  whether  the 
title  to  the  property  has  passed  to  jhe  purchaser  ^br_sfill_jfii 
mams  in  the  vendor,  il  there  has  been  a  breach  by  the  buyer, 
by  refusing  to  accept  the  property  and  pay  for  it,  the  vendor 

has_  his"  remedy  in  an  action  Tor  damages."  (Rldfjlcy  \. 
Mooney,  16  Ind.  App.  362,  367.)  Such  is  the  general  law, 
and  the  buyer's  liability  for  unjust  refusal  to  accept  rests  on 
the  ordinary  principles  for  breach  of  contract.  "  When  the 
seller  under  an  executory  contract  to  sell  exercises  his  right 
to  resell  the  goods  because  of  the  buyer's  refusal  to  accept 
them,  this  does  not  excuse  the  buyer  from  liability.  The 
resale  is  not  an  alternative  remedy  of  the  seller  in  such  a 
case,  it  is  merely  a  means  of  fixing  the  amount  of  damages 
in  an  action  which  he  may  bring  against  the  buyer  for  the 
latter's  failure  to  accept  the  goods."  (Williston  on  Sales, 
§  581.)  See,  also,  Uniform  Sales  Act,  §  64. 

Same:  measure  of  damages. — "JThe  general  measure  of 
damages  in  such  a  case  is  the  difference  between  the  contract 
price  and  tl]£lnMrkeJ^£rice_a,t  l^^tjm^jnd^^ejof^deTfverj. 
This  nieasure  is  adopted  as  one  that  will  generally  give  com- 
plete indemnity  to  the  seller.  He  can  dispose  of  the  com- 
modity contracted  'to  be  sold  at  the  market  price,  and  his 
damage  will  be  the  difference  between  the  price  thus  obtained 
and  the  price  he  would  have  received  if  the  contract  had  been 
performed.  Evidence  as  to  the  price  need  not  be  confined 
to  the  precise  time  when  the  contract  was  to  have  been  per- 
formed. It  may  sometimes  be  impracticable  to  show  the 
price  at  the  precise  time,  and  hence  evidence  of  the  price  for 
a  brief  period  before  and  after  the  time  may  be  given,  not 
for  the  purpose  of  establishing  a  market  price  at  any  other 
time,  but  for  the  purpose  of  showing  as  well  as  practicable 
the  market  price  on  the  day  the  contract  was  to  have  been 
performed.  j>o_itjnay  not  alwaysJbej)rag^i^fHft  fo  phnw  Jhe 
price  at  the  precise  place  of  delivery.  There  may  have  been 
no  sales  of  the  commodity  there,  and  hence  evidence  of  the 
price  at  places  not  distant,  or  in  other  controlling  markets 


176  SUMMABY    OF    SALES. 

may  be  given,  not  for  the  purpose  of  establishing  a  market 
price  at  any  other  place,  but  for  the  purpose  of  showing  the 
market  price  at  the  place  of  delivery."  (Cohen  v.  Plait,  69 
N.  Y.  348,  351.) 

"  But  to  assert  that  the  price  asked  in  the  market  for  an 
article  is  the  true  and  only  test  of  value,  is  to  abandon  the 
proper  object  of  damages,  viz.,  compensation,  in  all  those 
cases  where  the  market  evidently  does  not  afford  the  true 
measure  of  value.  .  .  .  Value  and  market  price  are  not 
always  convertible  terms  L  and  certainly there  can  be  no 
differgnce^in^^ustice  or  law,  in  an  unnatural  depression  and_ 
an  unnatural  exaltation  in  the  market  price  —  neither  is  the 
true  and  only  measure  of  value."  (Kountz  v.  Kirkpatrick ,  72 
Pa.  St.  376,  387.)  "^TThe  law,  in  regulating  the  measure 
of  damages,  contemplates  a  range  of  the  entire  market,  and 
the  average  of  prices,  as  thus  found,  running  through  a 
reasonable  period  of  time.  Neither  a  sudden  and  transient 
inflation,  nor  a  depression  of  prices,  should  control  the  ques- 
tion. These  are  often  accidental,  promoted  by  interested  and 
illegitimate  combinations,  for  temporary,  special  and  selfish 
objects,  independent  of  the  objects  of  lawful  commerce;  a 
forced  and  violent  perversion  of  the  laws  of  trade,  not  within 
the  contemplation  of  the  regular  dealer,  and  not  deserving 
to  be  regarded  as  a  proper  basis  upon  which  to  determine  the 
value,  when  the  fact  becomes  material  in  the  administration 
of  justice."  (Smith  v.  Griffith,  3  Hill,  333,  337.) 

Some  rules  for  the  measure  of  damages. —  In  Kingman  & 
Co.  v.  Western  Mfg.  Co.,  92  Fed.  Eep.  486,  490,  is  found 
the  following  formulation  of  rules  for  the  measure  of  dam- 
ages:— 

"  1.  The  measure  of  damages  for  a  breach  of  a  contract  to 
purchase  personal  property  is  the  difference  between  the 
market  value  and  the  contract  price  of  the  property  at  the 
time  of  the  breach,  if  the  latter  be  greater  than  the  former. 

"  2.  The  same  rule  is  applicable  to  the  measure  of  dam- 
ages resulting  from  the  failure  to  accept  articles  which  have 


REMEDIES.  177 

been  made  and  are  ready  for  delivery  at  the  time  of  the 
breach  by  the  purchaser  of  the  contract  to  purchase  goods  of 
a  manufacturer,  but  it  is  not  the  true  rule  for  the  measure  of 
damages  resulting  from  the  breach  on  account  of  those  not 
then  made  and  ready  for  delivery. 

"  3.  Where  materials  have  been  purchased  and  labor  has 
been  bestowed  upon  such  articles  under  such  a  contract  before 
the  manufacturer  has  notice  of  the  breach,  his  damages  on 
these  articles  are  the  difference  between  the  amount  it  would 
cost  him  to  make  and  deliver  them  and  their  contract  price, 
if  greater,  plus  the  difference  between  the  value  of  the  party 
manufactured  articles  and  the  cost  of  the  labor  and  materials 
that  had  been  bestowed  upon  them  at  the  time  of  the  breach, 
if  the  cost  be  greater  than  the  value. 

"  4.  If  materials  have  been  purchased  with  which  to  fulfill 
the  contract,  but  no  work  has  been  bestowed  upon  them  at 
the  time  of  the  breach,  the  measure  of  the  manufacturer's 
damages  upon  the  articles  which  might  have  been  made  with 
such  materials  under  the  contract  is  the  difference  between 
the  amount  it  would  cost  him  to  make  and  deliver  them, 
including  the  cost  of  the  materials,  and  their  contract  price, 
if  greater,  plus  the  difference  between  the  cost  and  the  market 
value  of  the  materials  that  have  been  purchased  at  the  time 
of  the  breach,  if  the  market  value  be  less  than  the  cost. 

"  5.  The  measure  of  the  damages  upon  articles  covered  by 
such  a  contract  for  which  no  materials  had  been  bought,  and 
upon  which  no  work  had  been  expended  at  the  time  of  the 
breach,  is  the  difference  between  the  amount  it  would  cost 
the  manufacturer  to  make  and  deliver  them  and  their  con- 
tract price,  if  that  price  is  greater  than  the  cost." 

Anticipatory  breach  of  contract. —  In  case  a  promisor 
notifies  his  promisee  that  he  will  not  perform  when  the  time 
for  performance  arrives,  "  the  promisee,  if  he  pleases,  may 
treat  the  notice  of  intention  as  inoperative,  and  await  the 
time  when  the  contract  is  to  be  executed,  and  then  hold  the 
other  party  responsible  for  all  the  consequences  of  nonper- 
12 


178  SUMMARY  OF  SALES. 

f onnance ;  but  in  that  .case  he  keeps  the  contract  alive  for  the 
benefit  of  the  other  party  as  well  as  his  own;  he  remains 
subject  to  all  his  own  obligations  and  liabilities  under  it, 
and  enables  the  other  party  not  only  to  complete  the  contract, 
if  so  advised,  notwithstanding  his  previous  repudiation  of 
it,  but  also  to  take  advantage  of  any  supervening  circum- 
stance which  would  justify  him  in  declining  to  complete  it. 
On  the  other  hand,  the  promisee  may,  if  he  thinkg  proper, 
treat  the  repudiation  of  the  other  party  as  a  wrongful  putting 
an  end  to  the  contract,  and  may  at  once  bring  his  action  as 
on  a  breach  of  it;  and  in  such  action  he  will  be  entitled  to 
such  damages  as  would  have  arisen  from  the  nonperformance 
of  the  contract  at  the  appointed  time,  subject,  however,  to 
abatement  in  respect  of  any  circumstances  which  may  have 
afforded  him  the  means  of  mitigating  his  loss."  (Frost  v. 
Knight,  L.  E.  7  Ex.  Ill,  112.)  This  rule,  which  is  open  to 
criticism  (see  Williston  on  Sales,  §§  586-589),  has  seemingly 
been  accepted  in  some  jurisdictions  (Cohen  v.  Plaii,  69 
N.  Y.  348;  Windmuller  v.  Pope,  107  K  Y.  674;  Hicks  v. 
British  Am.  Ass.  Co.,  162  !N".  Y.  284;  Langan  v.  Supreme 
Council,  174  N.  Y.  266;  O'Neil  v.  Supreme  Council,  70 
N.  J.  Law,  410;  Hocking  v.  Hamilton,  158  Pa.  St.  107), 
but  rejected  in  others  (South  Gardiner  Lumber  Co.  v.  Brad- 
street,  97  Me.  165;  Porter  v.  Am.  Legion  of  Honor,  183 
Mass.  326). 

For  a  review  of  English  and  American  cases  thereon  see 
Roehm  v.  Horst,  178  II.  S.  1,  in  which  the  court  concludes 
that  the  rule  laid  down  in  Hochster  v.  De  La  Tour,  2  El.  &  Bl. 
678,  is  reasonable  and  proper,  viz.,  "  to  allow  an  option  to 
the  injured  party,  either  to  sue  immediately,  or  to  wait  till 
the  time  when  the  act  was  to  be  done,  still  holding  it  as  pros- 
pectively  binding  for  the  exercise  of  this  option,  which  may 
be  advantageous  to  the  innocent  party,  and  cannot  be  prej- 
udicial to  the  wrongdoer."  And  in  Pakas  v.  Hollingshead, 
184  N.  Y.  211,  214,  it  is  held  that  "  there  can_  be  but^  qn^ 
action  for  damages  for  a  total  breach  oT~an  entire  contract 
to  deliver  goods,  and  the  fact  that  they  were  to  be  delivered 


EEMEDIES.  179 

in  installments  from  time  to  time  does  not  change  the  general 
J^eZ* 

In  Kelly  v.  Security  Mutual  Life  Ins.  Co.,  186  N.  Y.  16, 
19,  it  is  stated  that  "  the  rule  that  renunication  of  a  continu- 
ous executory  contract  by  one  party  before  the  day  of  per- 
formance gives  the  other  party  the  right  to  sue  at  once  for 
damages,  is  usually  applied  only  to  contracts  of  a  special 
character,  even  in  the  jurisdictions  where  it  obtains  at  all. 
It  is  not  generally  applied  to  contracts  for  the  payment  of 
money  at  a  future  time,  and  in  some  states  the  principle  is 
not  recognized  in  any  way  whatever.  (Daniels  v.  Newton, 
114  Mass.  530 ;  Stanford  v.  McGill,  6  N.  Dak.  536 ;  Carstens 
v.  McDonald,  38  Neb.  858;  King  v.  Waterman,  55  Neb. 
324.)  In  other  states  and  in  the  Federal  courts  the  principle 
is  adopted  but  applied  with  caution.  (Roehm  v.  Horst,  178 
U.  S.  1,  17,  18;  Schmitt  v.  Schnell,  14  Ohio  C.  C.  153; 
Brown  v.  Odill,  104  Tenn.  250;  Roebling's  Sons  Co.  v. 
Fence  Co.,  130  111.  660;  Unexcelled  Fire-Works  Co.  v. 
Polites,  130  Pa.  St.  536.)  In  this  statejt  seems  to  be  limited 
to  contracts  to  marry  (Burtls  v.  Thompson,  43  N.  Y.  246) ; 
for  personal  services  (Howard  v.  Daly,  61  N.  Y.  362)  and 
for  the  manufacture  or  sale  of  goods  (Windmuller  v.  Pope, 
107  N.  Y.  674;  Nichols  v.  Scranton  Steel  Co.,  137  N.  Y. 
471)  ;  at  least  we  have  not  extended  it  to  mutual  life  insur- 
ance policies,  perhaps  for  the  reason  that  the  question  of  fact 
opened  to  unscrupulous  persons  by  such  extension  might 
undermine  the  solvency  of  the  company  and  inflict  gross 
injustice  upon  the  other  policy  holders." 

Seller  vs.  goods :  lien. — "  When  goods  are  sold,  qnd  there 
is  no  stipulation  for  credit  or'time  allowecTlor  payment,  the 
vendor  has  by  tSe  common  law  a  lien  for  the  price;  in  other. 

words?  EJLJg  not_bound_actually  to  part  with  the  possession 
of  the  goods,  without  being  paid  for  them.  The  term  lien 
imports,  that  by  the  contract  of  sale,  and  a  formal,  symboli- 
cal or  constructive  delivery,  the  property  has  vested  in  the 
vendee;  because  no  man  can  have  a  lien  on  his  own  goods. 


180  SUMMARY  OF  SALES. 

The  very  definition  of  a  lien  is,  a  right  to  hold  goods,  the 
property  of  another,  in  security  for  some  debt,  duty  or  other 
obligation.  If  the  holder  is  the  owner,  the  right  to  retain  is 
a  right  incident  to  the  right  of  property;  if  he  have  had  a 
lien,  it  is  merged  in  the  general  property. 

"A  lien  for  the  price  is  incident  to  the  contract  of  sale, 
when  there  is  no  stipulation  therein  to  the  contrary;  because 
a  man  is  not  required  to  part  with  his  goods,  until  he  is  paid 
for  them.  But  conventio  legem  vincit;  and  when  a  credit  is 
given_byjigreement,  the  vendee  has  a  right  to  the  custody  and 
actual  .possession,  on  a  promise  tcTpay  at  a  future  time.  He 
may  then  take  the  goods  away,  and  into  his  own  actual  pos- 
session; and  if  he  does  so,  the  lien  of  the  vendor  is  gone,  it 
being  a  right  incident  to  the  possession."  (Arnold  v.  Delano, 
4  Gush.  33,  38.) 

See  section  54  of  the  Uniform  Sales  Act. 

Default  in  payment  does  not  rescind  bargain. —  In 
Martindale  v.  Smith,  1  Adol.  &  E.  (N.  S.)  389,  the  defend- 
ant sold  the  plaintiff  six  specific  oat  stacks  for  £85.  The 
price  was  to  be  paid  on  a  day  certain,  but  meanwhile  the 
stacks  were  left  in  the  seller's  possession.  The  plaintiff  did 
not  pay  on  the  fixed  day,  but  later  requested  time,  which  de- 
fendant refused  to  extend,  adding  that  as  he  had  failed  to 
pay  at  the  time  appointed,  he  should  not  have  the  stacks.  A 
few  days  later,  plaintiff  made  an  actual  tender  which  was 
refused,  and  defendant  afterwards  sold  said  stacks  to  other 
parties.  The  plaintiff  then  sued  the  defendant  in  trover  and 
recovered,  Lord  Denman,  C.  J.,  saying,  "The  Jtale  of  a 
specific  chattel  on  credit,  though  that  credit  may  be  limited 
to  a  definite  period,  transfers  the  property  in  the  goods  to 
the  vendee,  giving  the  vendor  a  right  of  action  for  the  price, 
and  a  lien  upon  the  goods,  if  they  remain  in  his  possession, 
till  that  price  be  paid.  But  that  default  of  payment  does  not 
rescind  the  contract. 

"  The  vendor's  right,  .  .  .,  to  detain  the  thing  sold 
against  the  purchaser,  must  be  considered  as  a  right  of  lien 
till  the  price  is  paid,  not  a  right  to  rescind  the  bargain." 


REMEDIES.  181 

Lien  after  part  delivery. — "  Where  an  unpaid  seller  has 
made  part  delivery  of  the  goods,  he  may  exercise  his  right  of 
lien  on  the  remainder,  unless  such  part  delivery  has  been 
made  under  such  circumstances  as  to  show  an  intent  to  waive 
the  lien  or  right  of  retention."  (Uniform  Sales  Act,  §  55.) 

Waiver  of  lien. — "  The  law,  in  holding  that  a  vendor,  who 
has  thus  given  credit  for  goods,  waives  his  lien  for  the  price, 
does  so  on  one  implied  condition,  which  is,  that  the  vendee 
shall  keep  his  credit  good.  If,  therefore,  before  payment,  the 
vendee  become  bankrupt  or  insolvent,  and  the  vendor  still 
retains  custody  of  the  goods,  or  any  part  of  them;  or  if  the 
goods  are  in  the  hands  of  a  carrier,  or  middle-man,  on  their 
^way  to  the  vendee,  and  have  not  yet  got  into  his  actual  posses- 
sion, and  the  vendor,  before  they  do  so,  can  regain  his  actual 
possession,  by  a  stoppage  in  transitu;  then  his  lien  is  re- 
stored, and  he  may  hold  the  goods  as  security  for  the  price. 

"  The  principle  we  take  to  be  well  settled,  but  the  difficulty 
which  arises  in  practice, —  one  which  has  given  rise  to  so 
many  cases, —  lies  in  determining  what  is  such  an  actual 
change  of  possession  from  the  vendor  to  the  vendee,  as  shall 
be  deemed  to  put  an  end  to  the  vendor's  lien.  Some  cases 
seem  to  be  clear,  and  to  illustrate  the  rule.(j)If  the  goods  are 
delivered  to  the  vendee's  own  servant,  agent,  wagoner,  or 
shipmaster,  that  is  in  law  a  delivery  to  the  vendee  himself, 
if  goods  are  stored  in  a  common  warehouse,  as  the  dock 
warehouses  at  the  London  docks,  and  entered  in  the  books  as 
the  property  of  A.  B.,  and  deliverable  to  him,  and  a  dock 
warrant  issued,  and  afterwards,  upon  the  proper  order  of 
A.  B.  on  the  warrant,  the  whole  or  a  part  are  transferred  to 
C.  D.,  and  entered  in  like  manner  in  his  name,  this  is 
an  actual  change  of  custody,  though  the  goods  are  not  moved 
from  their  position^  So,  if  the  seller  sustain  different  char- 
acters, as  if  a  person,  who  is  a  livery  stable  keeper,  having  a 
horse  to  sell,  makes  a  sale  to  C.  D.,  and  then  transfers  the 
horse  to  his  livery  stable,  to  be  kept  for  C.  D.  at  a  stipulated 
weekly  hire,  this  may  be  regarded  as  an  actual  change  of 
custody  and  possession. 


182  SUMMARY  OF  SALES. 

r  "  But  by  far  the  most  common  case  which  occurs,  is  where 
goods  are  ordered  by  letter,  on  credit,  to  be  sent  from  one 
country  to  another,  or  from  one  part  of  the  same  country  to 
another,  and  are  accordingly  forwarded  by  a  common  carrier. 
There,  as  the  carrier  is  not  the  servant  of  the  vendee,  the 
goods,  though  they  have  left  the  actual  possession  of  the 
vendor,  if  they  have  not  reached  the  actual  custody  of  the 
vendee,  or  the  ultimate  place  of  destination  ordered  by  him, 
may  be  stopped  in  transitu  by  the  vendor;  and  if  he  can 
thus  stop  them,  he  regains  his  lien."  (Arnold  v.  Delano,  4 
Gush.  33,  39.) 

See,  also,  section  56  of  the  Uniform  Sales  Act. 

Seller  vs.  goods :  stoppage  in  transit. — "A  seller,  who  has 
sent  goods  to  a  buyer  at  a  distance,  and,  after  sending  them, 
finds  that  the  buyer  is  insolvent,  may  stop  the  goods  at  any 
time  before  they  reach  the  buyer.  His  right  to  do  this  is 
called  the  right  of  stoppage  in  transitu."  (Parson's  Mer- 
cantile Law,  60.) 

See,  also,  section  57  of  the  Uniform  Sales  Act. 

Origin  of  the  right  of  stoppage  in  transit. — "  In  courts 
of  equity  it  has  been  a  received  opinion  that  it  was  founded 
on  some  principle  of  common  law.  In  courts  of  law  it  is 
just  as  much  the  practice  to  call  it  a  principle  of  equity, 
which  the  common  law  has  adopted.  This  was  strongly  in- 
sisted upon  by  Mr.  Justice  Buller,  in  his  celebrated 
judgment  in  the  House  of  Lords,  in  the  case  of  Lick- 
barrow  v.  Mason,  4  Bro.  P.  C,  57.  It  has  also  been  said 
by  Lord  Kenyon,  that  it  was  a  principle  of  equity  adopted  by 
the  common  law  to  answer  the  purposes  of  justice.  The 
most  eminent  equity  lawyers  that  I  have  had  the  opportunity 
of  conversing  with  in  times  that  are  gone  by,  were  unanimous 
in  repudiating  it  as  the  offspring  of  a  court  of  equity.  The 
first  case  that  occurred  upon  this  subject  affords  some  author- 
ity for  the  opinion  of  Mr.  Justice  Buller  and  Lord  Kenyon. 
It  is  the  case  of  Wiseman  v.  Vandeput,  2  Vern.  203,  in  1690. 
That  was  a  bill  filed  by  the  assignees  of  the  bankrupt  against 


REMEDIES.  183 

the  vendor.  The  Lord  Chancellor  directed  an  action  of 
trover  to  be  brought  by  the  plaintiffs,  upon  which  they  re- 
covered a  verdict.  It  is  clear,  therefore,  that  the  rule  had 
not  at  that  time  been  adopted  at  law.  The  Lord  Chancellor, 
however,  adopted  it  in  equity,  and,  notwithstanding  the  ver- 
dict at  law  for  the  plaintiffs,  made  a  decree  against  them. 
The  next  case  is  that  of  Snee  v.  Prescott,  1  Atk.  24.  Lord 
Hardwicke  again  applied  the  rule  to  a  certain  extent  in 
equity.  But  it  is  remarkable  that  he  received  evidence  of 
what  was  the  custom  of  merchants  on  this  point;  and  he 
expressly  founds  his  decree  upon  the  evidence  of  the  custom 
of  merchants,  as  well  as  upon  the  justice  of  the  case.  This 
decision  occurred  about  the  year  1742  or  1743.  The  next 
case  is  that  of  Ex  parte  Wilkinson,  in  1755,  referred  to  in 
D'Aquila  v.  Lambert,  Ambler,  399,  which  took  place  in 
1761.  There  the  Lord  Chancellor  again  grounded  his  de- 
cree on  the  usage  of  merchants,  and  stated  that  the  several 
previous  decisions  which  had  taken  place  to  the  same  effect, 
had  given  great  satisfaction  to  the  merchants.  .ETumerpus 
cases  have  followed  at  law,  showing  that  the  right  of  stop- 
page in  iransitu,  under  certain  circumstances,  is  now  part 
of  common  law. 

"  Nevertheless,  owing  perhaps  to  the  doubtful  state  of  its 
parentage,  many  unsatisfactory  and  inconsistent  attempts 
have  been  made  to  reduce  it  to  some  analogy  with  the  prin- 
ciples which  govern  the  law  of  contract,  as  it  prevails  in 
this  country  between  vendor  and  vendee.  It  is  to  be  observed, 
however,  that  the  right  of  stoppage  in  transitu  is  not  peculiar 
to  the  law  of  England.  It  existed,  I  believe,  in  the  com- 
mercial states  of  Europe.  The  cases  I  have  already  referred 
to,  show  that  it  was  practiced  in  the  Italian  states.  That 
it  existed  in  Holland  was  proved  in  a  case  tried  by  Lord 
Loughbo rough,  and  mentioned  by  him  in  his  judgment  in 
the  case  of  Lickbarrow  v.  Mason,  1  H.  Bl.  364.  That  it  is 
the  law  of  Russia  was  also  proved  in  the  cases  of  Inglis  v. 
Usherwood,  1  East,  515,  and  of  Bothlingk  v.  Inglis,  3  East, 
381.  It  appears  also,  on  reference  to  the  Chapitre  de  la 


184  SUMMARY  OF  SALES. 

Faillite,  in  the  Code  of  Napoleon,  that  the  law  of  France 
on  this  subject  is  in  all  points  similar  to  our  own.  It  is 
known  that  this  celebrated  code  is  chiefly  a  digest  of  the 
law  of  France  as  it  existed  before  the  Revolution.  Indeed 
the  right  of  stopping  in  transitu  had,  before  the  composition 
or  digest  of  that  code,  acquired  the  name  in  the  French  law 
of  '  Revendication.'  _It  may,  therefore,  be  presumed  to  be 
a  part  of  the  law  of  merchants  which  prevails  generally  on 
the  continent.  The  proof  of  which,  from  time  to  time,  com- 
bined with  its  manifest  justice  and  utility,  has  at  length 
introduced  it  into  the  common  law  of  England,  of  which 
the  law  merchant  properly  understood  has  always  been  reck- 
oned to  form  a  part."  (Lord  Abinger,  C.  B.,  in  Gibson  v. 
Carruthers,  8  M.  &  W.  321,  338.) 

Essentials  of  the  right  of  stoppage  in  transit. — "  In  order 
that  the  seller  shall  have  the  right  to  stop  goods  in  transit, 
these  circumstances  must  concur:  (1)  There  must  be  an 
unpaid  seller;  (2)  the  title  to  the  goods  must  have  passed; 

(3)  goods  must  be  in  transit  from  the  seller  to  the  buyer; 

(4)  the  buyer  must  be  insolvent;  (5)  a  resale  of  the  goods 
by  the  buyer  must  not  have  cut  off  the  right."   (Williston 
on  Sales,  §  520.) 

Goods  must  be  in  transit. —  The  goods,  to  be  subject  to  the 
exercise  of  the  right  of  stoppage  in  transit,  must  be  in  the 
hands  of  a  carrier  or  middleman  on  the  way  to  the  buyer, 
and  "  this  right  continues  not  only  while  the  goods  are  in 
actual  transit,  but  until  they  have  reached  their  destination, 
and  are  delivered  into  the  actual  or  constructive  possession 
of  the  consignee."  (Harris  v.  Tenney,  85  Tex.  254,  258.) 
Even  "  the  unloading  of  the  goods  and  the  placing  of  them 
in  the  warehouse  of  the  railroad  company  does  not  neces- 
sarily terminate  the  transitus,  nor  put  an  end  to  the  right  of 
stoppage ;  so  long  as  they  remain  in  the  hands  of  the  carrier 
or  middleman  as  such,  the  right  does  not  cease."  (Symns  v. 
Schotten,  35  Kans.  310,  313.) 

The  right  of  stopping  goods  in  transit  may  exist  where 


REMEDIES.  185 

the  consignee  is  the  owner  or  hirer  of  the  ship  on  board  of 
which  the  goods  have  been  delivered.  "  The  right  of  stopping 
all  goods  shipped  on  the  credit  and  risk  of  the  consignee 
remains  until  they  come  into  his  actual  possession  at  the 
termination  of  the  voyage,  unless  he  shall  have  previously 
sold  them  bona  fide,  and  indorsed  over  the  bills  of  lading 
to  the  purchaser.  And  in  our  opinion,  the  true  distinction 
is,  whether  any  actual  possession  of  the  consignee  or  his 
assigns,  after  the  termination  of  the  voyage,  be  or  be  not 
provided  for  in  the  bills  of  lading.  When  such  actual  pos- 
session, after  the  termination  of  the  voyage,  is  so  provided 
for,  then  the  right  of  stopping  in  transitu  remains  after 
the  shipment.  Thus,  if  goods  are  consigned  on  credit,  and 
delivered  on  board  a  ship  chartered  by  the  consignee,  to  be 
imported  by  him,  the  right  of  stopping  in  transitu  continues 
after  the  shipment  (3  East,  381)  ;  but  if  the  goods  are  not 
to  be  imported  by  the  consignee,  but  to  be  transported  "ff^ 
tEe  place  of  shipment  to  a  foreign  market,  the  right  of 

-__  ----  •*•  ,     —         -      --  -        *~  —  •••-    ----  1  •       ill     i  _____  ijiuBin      ..._i.    ...        ii  -----  T*-  in  L  |     _  _____     J*_          i 

stopping  in  transitu  ceases  on  the  shipment,  the  transitbeing 
then  completed;  because  no  other  actual  possession  of  the 

by  the  consignee  is  provided  for  in  the  bills  of  lading, 


which  express  the  terms  of  the  shipment.  (7  D.  &  E.  442.) 
""The"  same  rule  must  govern,  if  the  consignee  be  the 
shipowner.  If  the  goods  are  delivered  on  board  his  ship, 
to  be  carried  to  him,  an  actual  possession  by  him,  after  the 
delivery,  is  provided  for  by  the  terms  of  the  shipment;  but 
if  the  goods  are  put  on  board  his  ship  to  be  transported 
to  a  foreign  market,  he  has  on  the  shipment  all  the  posses- 
sion contemplated  in  the  bills  of  lading.  In  the  former  case 
the  transit  continues  until  the  termination  of  the  voyage; 
but  in  the  latter  case  the  transit  ends  on  the  shipment." 
(Stubbs  v.  Lund,  7  Mass.  453,  457.) 

Again,  "  there  has  been  a  difficulty  in  some  cases  where 
the  question  was  whether  the  original  transit  was  at  an  end, 
and  a  fresh  transit  had  begun.  The  way  in  which  that 
question  has  been  dealt  with  is  this:  when  the  transit  is 
a  transit  which  has  been  caused  either  by  iflfr  iermg  of  the 


186  SUMMAEY    OF    SALES. 

contract  or  by  the  directions  of  the  purchaser  to  the  vendor, 
the  right  of  stoppage  in  transitu  exists ;  but  if  the  goods  are 
not  in  the  hands  of  a  carrier  by  reason  either  of  the  terms  of 
the  contract  or  of  the  directions  of  the  purchaser  to  the 
vendor,  but  are  in  transitu  afterwards,  in  consequence  of 
fresh  directions  given  by  the  purchaser  for  a  new  transit, 
then  such  transit  is  no  part  of  the  original  transit,  and  the 
right  to  stop  is  gone.  So,  also,  if  the  purchaser  gives  orders 
that  the  goods  shall  be  sent  to  a  particular  place,  there  to 
be  kept  till  he  gives  fresh  orders  as  to  their  destination  to 
a  new  carrier,  the  original  transit  is  at  an  end  when  they 
have  reached  that  place,  and  any  further  transit  is  a  fresh 
and  dependent  transit."  (Lord  Esher  in  Bethell  v.  Clark,  20 
Q.  B.  D.  615.) 

See,  also,  section  58  of  the  Uniform  Sales  Act. 

Insolvency  of  buyer. — "  The  right  of  stoppage  in  transitu, 
is  the  right  of  the  vendor  to  resume  possession  of  the  goods 
sold,  while  they  are  in  transit  to  the  vendee,  who  is  insolvent, 
or  in  embarrassed  circumstances.  Actual  insolvency  of  the 
vendee  is  not  essential.  It  is  sufficient  if  before  the  stoppage 
in  transitu,  he  was  either  in  fact  insolvent,  or  had,  by  his 
conduct  in  business,  afforded  the  ordinary  apparent  evi- 
dences of  insolvency.  Nor  is  the  vendor's  right  abridged, 
or  in  any  way  affected  by  the  fact  that  he  has  received  the 
vendee's  bills  of  exchange,  or  other  negotiable  securities 
for  the  whole  price,  even  though  they  have  been  negotiated 
and  are  still  outstanding."  (Diem  v.  Koblitz,  49  Ohio  St. 
41,  51.) 

See,  also,  section  76  (3)  of  the  Uniform  Sales  Act. 

Resale  by  buyer  of  goods  in  transit. — A  mere  resale  by^ 
the  buyer  of  goods  in  transit  will  not  destroy  the  right  to 
stop  them  in  transit.  (Craven  v.  Ryder,  6  Taunt.  433; 
Pattison  v.  Culton,  33  Ind.  240.)  "There  is  no  doubt  if 
the  vendee  make  a  resale  of  the  goods  he  makes  it  subject 
to  the  vendor's  right  to  stop  the  goods  in  transitu.  But  this 
is  while  the  goods  are  going  to  the  first  vendee.  After  the 


REMEDIES.  187 

first  vendee  has  resold  them  and  put  them  on  their  second 
passage,  the  transit  between  the  vendor  and  his  vendee  is 
at  an  end.  But  a  resale  will  not  defeat  the  vendor's  right 
to  stop  the  goods  in  transitu  until  they  have  reached  their 
first  destination,  unless  the  bill  of  lading  is  assigned,  or  the 
vendee  has  anticipated  the  arrival  and  taken  possession, 
which  he  may  do,  or  the  vendor  consents  to  the  resale." 
(Eaton  v.  Cook,  32  Vt.  58,  61.)  But,  "if,  beforethia 
right  is  exercised,  the  buyer  sells_tjie  goods,  and  indorses 
the  bill  of  lading  for  them  to  a  purchaser  in  good  faith,  and 
"for  value,  the  right  of  the  first  vendor  to  retake  them  is 
extinguished."  (Loeb  v.  Peters,  63  Ala.  243,  248,  citing 
~Lickbarrow  v.  Mason,  1  Smith's  Lead.  Cases,  388.) 

In  Newhall  v.  Central  Ry.,  51  Cal.  345,  it  was  held  that 
a  bona  fide  transferee  of  a  bill  of  lading,  for  value,  after 
notice  to  stop,  will  be '  protected,  on  the  ground  that  the 
vendor's  lien  "  is  only,'  a  secret  trust  as  to  a  person  who 
takes  an  assignment  01  a  bill  of  lading  '  without  notice  of 
such  circumstances  as  render  the  bill  of  lading  not  fairly 
and  honestly  assignable.' '  This  decision  has  not  been  gen- 
erally approved  by  text-writers  (Hutchinson,  Carriers, 
§  414;  Mechem,  Sales,  §  1567;  Burdick,  Sales  [2d  ed.], 
251-2),  "but,"  says  Professor  Williston  (Sales,  §  542), 
"  it  seems  clearly  better  to  limit  the  right  of  stoppage  in 
transitu  of  a  seller  who  has  intrusted  the  buyer  with  a  per- 
fect apparent  title,  than  to  deprive  the  innocent  purchaser 
of  the  goods.  Accordingly  in  the  Sales  Act  the  correctness 
of  this  decision  is  assumed  as  a  basis  for  the  provisions  of 
the  act.  (Section  62,  second  paragraph.)"  See,  also,  sec- 
tion 59  (2)  of  the  Uniform  Sales  Act. 

The  transfer  of  the  bill  of  lading  must  also  be  for  value. 
Courts  differ,  however,  as  to  what  constitutes  value,  some 
holding  that  an  antecedent  debt  is  sufficient  (Leask  v.  Scott, 
2  Q.  B.  D.  376 ;  Lee  v.  Kimball,  45  Me.  172 ;  Shepard  & 
Morse  Lumber  Co.  v.  Burroughs,  62  N.  J.  Law,  469),  and 
others  that  it  is  not  sufficient  (Loeb  v.  Peters,  63  Ala.  243). 
Under  section  76  of  the  Uniform  Sales  Act  it  would  be 


188  SUMMABY    OF    SALES. 

sufficient,  as  " '  value '  is  any  consideration  sufficient  to 
support  a  simple  contract.  An  antecedent  or  pre-existing 
claim,  whether  for  money  or  not,  constitutes  value  where 
goods  or  documents  of  titles  are  taken  either  in  satisfaction 
thereof  or  as  security  therefor." 

Effect  of  stoppage  in  transit. — "  It  seems  to  be  well 
settled,  that  where  the  right  of  stoppage  in  transitu  is 
properly  exercised,  the  effect  is  to  restore  the  vendor  to 
precisely  the  same  position  as  if  the  goods  had  never  left  his 
possession.  He  has  the  same  rights  with  respect  to  the  prop- 
erty, and  they  may  be  enforced  in  the  same  way.  His  right 
to  intercept  the  goods  before  they  reach  the  hands  of  the 
vendee,  and  his  right  to  withhold  those  still  in  his  possession, 
rest  upon  the  same  just  principle  that  the  insolvent  vendee 
cannot  require  the  vendor  to  deliver  the  goods  or  perform 
the  contract  when  he  himself  is  unable  to  pay  for  them,  or 
perform  the  contract  on  his  part.  To  require  the  goods  to 
be  delivered  to  such  vendee  would  simply  result  in  the  appli- 
cation of  the  property  of  one  man  to  the  payment  of  another 
man's  debts.  The  right  of  the  unpaid  vgndprj  mthjrejjp_ect> 
to  the  goods,  is  sometimes  called  a  lien;  and,  it  is  a  lien;  in 
the  sense  that  the  vendee,  upon  payment  or  tender  of  the 
price,  but  not  otherwise,  may  recover  them.  But  it  is  some- 
thing more  than  a  mere  common-law  lien,  which  is  only  a 
naked  right  of  possession.  With  the  goods  in  his  possession, 
the  vendor  has  a  special  property  in  them,  which  is  parcel 
of  his  original  ownership.  Whether  the  effect  of  the  stop- 
page in  transitu,  or  the  retention  of  the  goods  by  the  vendor, 
on  the  discovery  of  the  vendee's  insolvency,  is  to  rescind  the 
contract,  or  not,  has  been  the  subject  of  much  discussion, 
and  some  authors  say  the  question  is  not  yet  definitely 
settled.  But  the  prevailing  opinion  now  is,  we  believe,  that 
the  contract  is  not,  necessarily,  rescinded,  unless  the  parties 
by  their  conduct  so  treat  it;  that  conclusion,  being  most 
favorable  to  the  vendor,  for  whose  protection  the  doctrine  of 
jstoppage  in  transitu  was  first  established;  for,  if  the  exer- 


REMEDIES.  189 

cise  of  the  right  operated  to  rescind  the  contract,  the  vendor 
would  be  deprived  of  the  remedy,  which  it  is  now  generally 
conceded  he  has  in  a  proper  case,  upon  a  resale  of  the  goods, 
to  hold  the  vendee,  or  the  assignee  of  his  estate,  for  the  loss 
sustained  through  his  nonperformance  of  the  contract,  or  in 
consequence  of  a  fall  in  the  market  price.  And,  as  th_e_8tpj> 
j)age  does  not  rescind  the  contract  of  sale,  it  follows,  that 
the  vendee,  or  his  assignee,  may  obtain  the  goods  on  pay- 
ment of  the  price;  or,  if  the  vendee  was  able  and  ready  to 
perform  the  contract  on  his  part,  he  may  Recover  damages 
for  the  failure  of  the  seller  to  deliver  the  property  according 
to  its  terms."  (Diem  v.  Koblitz,  49  Ohio  St.  41,  51.)  See, 
also,  Babcock  v.  Bonnell,  80  K  Y.  244,  250. 

Seller  vs.  goods:  resale,  English  law.  —  In  Page  v. 
Cowasjee,  L.  R.  1  P.  C.  12T,  145,  Lord  Chelmsford,  in 
1866,  stated  the  law  as  follows:  "  Martindale  v.  Smith,  \ 
Q.  B.  389,  and  other  cases  have  determined  that  where  there 
is  an  agreement  to  purchase  property,  to  be  paid  for  at  a 
future  time,  and  the  money  is  not  paid  at  the  day,  the  prop- 
erty remaining  in  the  possession  of  the  vendor,  he  has  no 
right  to  sell  it,  and  if  he  does  the  purchaser  may  maintain 
trover  against  him.  There  may  be  cases  where  the  vendor 
might  sell  without  rendering  himself  liable  to  an  action,  as 
where  goods  sold  are  left  in  the  possession  of  the  vendor, 
and  the  purchaser  will  not  remove  them  and  pay  the  price 
after  receiving  express  notice  from  the  vendor  that,  if  he 
fail  to  do  so,  the  goods  will  be  resold.  But  the  authorities 
are  uniform  on  this  point,  that  j 


vendor  resells  the  property  while  the  purchaser  is  in 

the  resale  will  "not  authorize  ^the  purchaser  to  consider  Jlffi 

contract  rescinded,  ^10  as  to  entitle  him  to  recover  back  any 

deposit  of  the  price,  or  to  resist  paying  any  balance  of  it 
which  may  be  still  due?* 

"According  to  this  authority,"  say  the  authors  of  Benja- 
min on  Sales  (5th  Eng.  ed),  934,  "  and  that  of  Lord  Black- 
burn (Cont.  of  Sale,  325  [2d  ed.],  459)  .  .  .,  a  seller 


190  SUMMAKY    OF    SALES. 

may  resell  on  the  buyer's  default,  and  the  buyer  cannot 
treat  the  contract  as  rescinded  by  the  resale.  This  proposi- 
tion is  undoubted  law.  But  .  .  .  Lord  Blackburn 
makes  the  further  suggestion,  which  was  adopted  by  Mr. 
Benjamin  (2d  ed.,  648,  655;  4th  ed.,  797,  804),  that  'in 
no  case  '  can  the  seller  rescind  the  contract  so  as  to  revest 
the  property  in  himself,  but  that  the  seller  resells  as  a  quasi- 
pledgee,  the  buyer  being  still  treated  as  the  owner  of  the 
goods.  The  soundness  of  this  view,  and  generally  the  ques- 
tion whether  a  resale  is  made  by  a  seller  in  some  capacity 
(whatever  that  may  be)  short  of  absolute  ownership,  depends 
upon  whether  he  can  or  cannot  rescind  the  contract  on  the 
buyer's  default,  and  whether  the  usual  results  of  a  rescission 
follow. 

"  There  is  much  confusion  both  in  the  cases  and  in  text- 
books with  respect  to  resale  —  a  confusion  largely  due  to  the 
ambiguous  use  of  the  terms  '  rescind '  and  '  default.7 ' 

After  a  review  of  the  cases,  the  same  authors,  at  page  949, 
thus  summarize  the  points  established  at  English  common 
law: 

"  1.  A  seller  may,  without  express  power  (at  any  rate 
if  he  gives  notice  of  resale),  resell  the  goods  when  the  buyer 
by  his  words  or  conduct,  absolutely  refuses  to  pay  for  them. 

"  2.  Simple  unpunctuality  in  payment  does  not  justify  a 
resale. 

"  3.  When  the  power  of  resale  is  an  express  one,  the 
seller  resells  as  owner. 

"4.  Whether  the  power  of  resale  be  an  express  one  or 
not, 

"  (a)  the  Tsuyer,  who  has  absolutely  refused  to  pay,  can- 
not treat  the  contract  as  rescinded  by  the  resale ; 

"  (b)  the  seller  cannot,  after  a  resale,  recover  the  price 
of  the  goods,  but  he  may  recover  damages  for  the  buyer's 
breach." 

See,  also,  English  Sale  of  Goods  Act,  §§  47,  48. 

Seller  vs.  goods :  resale,  American  law. —  The  law  thereon 
in  this  country  is  as  follows :  "  When  the  price  of  goods 


REMEDIES.  191 

sold  on  credit  is  due  and  unpaid,  and  the  vendee  becomes 
insolvent  before  obtaining  possession  of  them,  the  vendor's 
right  to  the  property  is  often  called  a  lien,  but  it  is  greater 
than  a  lien.  In  the  absence  of  an  express  power  the  lienor 
usually  cannot  transfer  the  title  to  the  property  on  which 
the  lien  exists  by  a  sale  of  it  to  one  having  notice  of  the 
extent  of  his  right,  but  he  must  proceed  by  foreclosure.  When 
a  vendor  rightfully  stops  goods <  in  transitu,  j>r.  retains  them, 
before  trdnxitux  has  begun,  he  can,  by  a  gale  made  on  notice 
to  the  vendee,  vest  a  purchaser  with  a  good  title.  (Dustan  v. 
McAndreiu,  44  X.  Y.  72.)  His  right  is  very  nearly  that 
of  a  pledgee,  with  power  to  sell  at  private  sale  in  case  of 
default."  (Tuthill  v.  Skidmore,  124  N.  Y.  148,  153.) 

See,  also,  Putnam  v.  Glidden,  159  Mass.  47,  and  section 
60  (1)  and  (2)  of  the  Uniform  Sales  Act. 

Same :  sales  and  contracts  to  sell. — "  One  important  pur- 
pose of  reselling  the  goods  is  to  fix  the  measure  of  the  buyer's 
liability  for  failure  to  fulfill  his  obligation.  In  order  that 
the  sale  should  furnish  an  accurate  test  of  the  seller's  injury, 
and  the  buyer's  wrong,  it  is  necessary  that  the  sale  should 
be  properly  made,  and  this  necessity  is  the  same,  whether 
the  property  in  the  goods  has  already  passed  to  the  buyer 
or  has  not  yet  passed.  Accordingly,  in  the  discussion  by 
the  courts  of  what  is  necessary  for  a  proper  resale,  no  dis- 
tinction generally  seems  to  be  observed  between  a  resale  be- 
fore the  transfer  of  the  property  and  after,  and  it  seems 
there  is  no  necessity  of  making  such  distinction,  except  in 
regard  to  the  time  when  the  resale  must  be  made."  (Willis- 
ton  on  Sales,  §  546.) 

In  Van  Brocklen  v.  Smeallie,  140  N.  Y.  70,  75,  it  is  said, 
"  In  this  court  the  rule  of  damages  for  a  breach  by  the  buyer 
of  a  contract  for  the  sale  of  personal  property,  is  perfectly 
well  settled.  (Dustan  v.  McAndrew,  44  N.  Y.  78 ;  Hayden 
v.  Demets,  53  id.  426.)  In  each  of  these  cases  it  was  ruled 
that  the  vendor  of  personal  property  has  three  remedies 
against  the  vendee  in  default.  (T)The  seller  may  store  the 


192  SUMMARY  OF  SALES. 

property  for  the  buyer  and  sue  for  the  purchase  price;  or 
Cjmay  sell  the  property  as  agent  for  the  vendee  and  recover  any 
deficiency  resulting;  orftnay  keep  the  property  as  his  own 
and  recover  the  difference  between  the  contract  price  and 
the  market  price  at  the  time  and  place  of  delivery.  In  the 
second  of  the  decisions  last  cited,  it  was  further  held  that 
the  rule  applied,  not  only  to  cases  where  the  title  passed  at 
once,  but  also  to  cases  where  the  contract  was  executory  but 
there  had  been  a  valid  tender  and  refusal." 

Seller  vs.  goods :  resale,  manner  and  notice  of. — "  Where 
the  second  method  [resale]  is  adopted  and  the  vendor  chooses 
to  make  a  resale,  that  need  not  be  at  auction,  unless  such 
is  the  customary  method  of  selling  the  property  in  question, 
nor  is  it  absolutely  essential  that  notice  of  the  time  and  place 
of  sale  should  be  given  to  the  vendee.  (Pollen  v.  LeEoy, 
30  N.  Y.  556.)  Still,  as  the  sale  must  be  fair^  and  such  as 
is  likely  to  produce  most  nearly  the  full  and  fair  value  of 
the  article,  it  is  always  wisest  for  the  vendor  to  give  notice 
of  his  intention  to  resell,  and  quite  unsafe  to  omit  it."  (Van 
Brocklen  v.  Smeallie,  140  1ST.  Y.  TO,  75.)  Such  is  the  gen- 
erally recognized  law,  and  in  accord  with  the  weight  of 
authority,  although  some  jurisdictions  require  notice  of  the 
seller's  intention  to  resell.  "  The  law  is  satisfied  with  a 
fair  sale,  made  in  good  faith,  according  to  established  busi- 
ness methods,  with  no  attempt  to  take  advantage  of  the 
vendee.  ...  A  public  competitive  sale  by  outcry  to  the 
highest  bidder,  duly  advertised  and  made  upon  notice  to  the 
vendee,  is  a  safer  method  of  measuring  the  damages  than  a 
sale  by  private  negotiation,  which  has  been  held  sufficient." 
(Ackerman  v.  Rubens,  167  N.  Y.  405,  408.) 

See,  also,  section  60  (3),  (4)  and  (5)  of  the  Uniform 
Sales  Act. 

Resale  before  expiration  of  credit. — "  There  is  a  dearth 
of  authority  as  to  what  steps  the  vendor  should  take  to  en- 
force his  lien  after  stopping  the  goods,  to  be  accounted  for, 
no  doubt,  as  was  said  in  Newhall  v.  Varges*,  15  Me.  314, 


REMEDIES.  193 

'  by  supposing  that  the  vendor  usually  obtaining  all  the  goods 
sold  finds  he  is  fully  paid,  or  if  not,  that  the  object  of  pursu- 
ing the  insolvent  vendee  is  not  worth  the  trouble  and  expense.' 
It  is,  however,  well  understood,  that  the  first  duty  of  the 
vendor  after  regaining  possession,  is  to  hold  the  goods  until 
the  purchase  price  becomes  due  under  the  contract  of  sale, 
so  as  to  be  able  to  deliver  them  upon  payment.  After  that 
he  may,  upon  notice  to  the  vendee,  sell  them,  and  recover 
the  difference  between  the  amount  received  at  the  sale  and  the 
contract  price,  or  he  can  sue  the  vendee  for  the  whole  price, 
'  provided  he  is  ready  to  deliver  them  upon  payment.'  (2 
Kent  [10th  ed.],  760.)"  (Shaw  v.  Lady  Ensley  Coal  Co., 
147  111.  526,  531.) 

But,  "  upon  what  just  principle  can  the  seller,  in  such  a 
case,  be  required  to  hold  the  goods  until  the  expiration  of 
the  credit  ?  It  is  true  that,  at  that  time,  the  vendee  may 
again  be  solvent,  and  able  to  pay.  There  is  no  presumption, 
or  assurance  that  he  will.  If  any  prpniffliption  ^rjaaa,  fo  M 
rather,  that  the_  insolvency  will  continue,  whichjs  more  in 
accordance  with  the  experience  of  the  commercial  world. 
.but,  .  f  .,  it  is  part  of  the  vendee's  engagement,  that 
he  will  maintain  his  credit,  which  is  broken  by  his  insolvency. 
And  it  would  be  unjust  to  require  the  vendor  to  sustain  the 
loss  resulting  from  the  destruction  or  deterioration  of  the 
goods  in  the  meantime,  which,  in  many  instances,  must  en- 
sue if  the  seller  is  compelled  to  keep  the  goods  shut  up,  and 
take  the  risk  of  the  future  solvency  of  the  buyer.  The  in- 
justice of  such  a  requirement  is  conceded  where  the  goods 
are  of  a  perishable  nature ;  and  the  vendor,  it  is  now  settled, 
is  not  obliged  to  keep  goods  of  that  character  until  the  ter- 
mination of  the  credit.  .  .  .  It  is  insisted,  however,  that 
the  right  of  sale  in  such  cases,  constitutes  an  exception  to  the 
rule.  In  our  opinion,  the  reasons  upon  which  the  exception 
rests,  if  it  be  such,  should  make  the  exception  the  general  rule. 
The  value  of  many  kinds  of  merchandise,  not  perishable,  de- 
pends largely  upon  their  being  in  the  market  at  the  appro- 

13 


194  SUMMARY  OF  SALES. 

priate  seasons,  and  to  supply  temporary  demands ;  and  if  not 
available  for  those  purposes,  at  the  proper  time,  they  become 
comparatively  worthless,  or  so  reduced  in  value  as  to  entail 
great  loss,  which  may  be  less  only  in  degree,  though  greater 
in  amount,  than  where  the  goods  are  perishable ;  and  it  is  no 
more  just  or  equitable,  to  subject  the  vendor  to  the  loss  in 
the  one  case,  than  in  the  other.  The  right  oJLresale  ought 
not,  jve_jthink,  be  made  to  depend  upon  the  degree  or  extent 
of  the  loss  that  must  ensue,  if  it  should  be  denied.  It  rests 
upon  a  different  principle,  and  grows  out  of  the  failure  of 
the  vendee  to  keep  his  engagement.  Not  that  the  contract  is 
thereby  rescinded,  for  that  would  defeat  the  vendor's  remedy 
for  damages  upon  resale  after  due  notice;  but,  that  he  may 
elect  to  treat  the  agreement  for  the  credit  as  at  an  end,  on 
account  of  the  vendee's  default.  We  see  no  good  reason  for 
holding  that  the  rights  of  the  seller  are  any  the  less  where 
the  sale  is  upon  credit,  and  the  property  is  retained  by  him 
on  account  of  the  buyer's  insolvency,  than  they  would  be  if 
the  sale  were  for  cash,  and  the  vendee  was  unable  to  pay  the 
price  agreed  upon.  In  either  case  the  incapacity  of  the  ven- 
dee to  perform  his  part  of  the  agreement,  and  insolvency  is 
incapacity,  warrants  the  vendor  in  withholding  performance 
on  his  part."  (Diem  v.  Koblitz,  49  Ohio  St.  41,  53.) 

The  New  York  Court  of  Appeals,  in  Pardee  v.  Kanady, 
100  N.  Y.  121,  126,  says:  "  The  mere  insolvency  of  one  of 
the  parties  to  a  contract  of  sale  is  not  equivalent  either  to 
a  rescission  or  a  breach.  It  simply  relieves  a  vendor  from 
his  agreement  to  give  credit,  and  payment  may  be  substi- 
tuted." If  the  vendor,  on  account  of  the  insolvency  of  the 
vendee,  is  relieved  from  a  part  of  his  agreement,  viz.,  to  give 
credit,  and  if  payment  forthwith  is  substituted  therefor,  and 
if  by  the  exercise  of  the  right  of  stoppage  in  transit  the  vendor 
regains  possession  of  the  goods  with  right  to  hold  as  security 
for  the  price,  he  might,  it  would  seem,  enforce  his  lien  before 
the  expiration  of  the  period  of  credit,  not  by  foreclosure,  but 
by  sale  on  notice  to  the  vendee,  who,  if  he  does  not  then  pay 
the  price,  would  be  concluded  by  the  sale,  and  his  right  to 


REMEDIES.  195 

redeem  would  be  lost.     This  would  be  the  logical  conclusion 
from  substitution  of  payment  for   the  agreement  to  give 
credit,  but  it  still  remains  that  such  substitution  actually 
forces  a  new  term  into  the  agreement  of  the  parties. 
See  section  60  (1)  and  (3)  of  the  Uniform  Sales  Act. 

Seller  vs.  goods :  resale  at  profit. — As  the  purpose  of  resale 
is  mainly  to  fix  the  measure  of  liability  of  the  defaulting 
buyer,  and  as  goods  are  ordinarily  resold  for  less  than  the 
contract  price,  the  seller  credits  the  net  amount  received  and 
holds  the  buyer  for  the  deficiency.  It  is  quite  immaterial, 
where  title  passed  to  the  defaulting  buyer,  whether,  upon 
resale,  we  regard  the  seller  as  agent  of  the  defaulting  buyer 
or  as  acting  under  authority  conferred  by  law,  the  fact  re- 
mains that  the  seller,  from  either  view,  disposes  of  property 
belonging  to  the  defaulting  buyer.  On  principle,  therefore, 
where  title  passed  to  the  defaulting  buyer,  the  seller,  upon 
reselling  for  more  than  the  contract  price,  i.  e.f  at  a  profit, 
whether  acting  as  agent  of  the  buyer  or  under  authority 
conferred  by  law,  should  likewise  credit  the  defaulting  buyer 
with  the  net  amount  received,  and  should  then  account  to  the 
buyer  for  any  surplus,  because  he  has  disposed  of  property, 
not  his  own,  but  property  belonging  to  the  buyer,  and  there 
being  surplus  instead  of  deficiency,  there  would  remain  no 
action  against  the  defaulting  buyer,  because  the  seller's 
damage  has  been  paid  in  full,  i.  e.,  he  has  been  compensated, 
and  more  he  is  not  entitled  to.  The  same  reasoning  would 
apply  to  executory  contracts  where,  as  in  New  York,  the 
seller  may  consider  the  property  as  belonging  to  the  buyer. 
(Mason  v.  Decker,  72  N.  Y.  595,  599.)  TheJaw.,JlQwever, 
seems  to  recognize  the  right  of  the  seller  to  aueh  surplna  or 
profit.  (Eridgford  v.  Crocker,  60  N".  Y.  627  j  Warren  v. 
~Buc7cminster,  24  N.  H.  336.) 

Where,  however,  title  does  not  pass  and  is  not  considered 
as  passing,  any  profit  realized  upon  a  sale  to  other  parties 
would,  of  course,  belong  to  the  seller,  because  in  such  case  he 
disposes  of  his  own  property,  and  not  property  of  the  default- 


196  SUMMAEY    OF    SALES. 

ing  buyer.  Such  is  obviously  not  resale,  though  often  so 
termed,  because  there  preceded  it  only  a  contract  to  sell,  and 
not  a  sale. 

Rescission  by  seller:  England — Eesumption  of  owner- 
ship by  the  seller,  because  of  the  buyer's  default,  is  not 
favored  by  the  law  of  England.  In  the  leading  case  of  Mar- 
tindale  v.  Smith,  1  Q.  B.  389,  395,  Lord  Denman,  C.  J., 
said:  "Having  taken  time  to  consider  of  our  judgment, 
owing  to  a  doubt  excited  by  a  most  ingenious  argument 
whether  the  vendor  had  not  a  right  to  treat  the  sale  as  at 
an  end,  and  reinvest  the  property  in  himself,  by  reason  of 
the  vendor's  failure  to  pay  the  price  at  the  appointed  time, 
we  are  clearly  of  opinion  that  he  had  no  such  right,  .  .  . 
For  the  sale  of  a  specific  chattel  on  credit,  though  that  credit 
may  be  limited  to  a  definite  period,  transfers  the  property  in 
the  goods  to  the  vendee,  giving  the  vendor  a  right  of  action 
for  the  price,  and  a  lien  upon  the  goods  if  they  remain  in  his 
possession  till  that  price  be  paid.  But  that  default  of  pay- 
ment does  not  rescind  the  contract." 

Rescission  by  seller :  America. —  By  the  weight  of  author- 
ity in  this  country,  however,  the  seller  under  such  circum- 
stances, if  "he  wishes,  is  permitted  to  rescind.  In  a  leading 
New  York  case,  it  is  said :  "  The  vendor  of  personal  prop- 
erty in  a  suit  against  the  vendee  for  not  taking  and  paying 
for  the  property,  has  the  choice  ordinarily  of  either  one  of 
three  methods  to  indemnify  himself.  (1)  He  may  store  or 
retain  the  property  for  the  vendee,  and  sue  him  for  the  entire 
purchase  price.  (2)  He  may  sell  the  property,  acting  as  the 
agent  for  this  purpose  of  the  vendee,  and  recover  the  differ- 
ence between  the  contract  price  and  the  price  obtained  on 
such  resale;  or  (3)  he  may  keep  the  property  as  his  own,  and 
recover  the  difference  between  the  market  price  at  the  time 
and  place  of  delivery,  and  the  contract  price."  (Dustan  v. 
Me  Andrew,  44  N.  Y.  72,  78.)  And,  in  Hayden  v.  Demets, 
53  1ST.  Y.  426,  "  it  was  further  held  that  the  rule  applied,  not 
only  to  cases  where  the  title  passed  at  once,  but  also  to  cases 


REMEDIES.  197 

where  the  contract  was  executory  but  there  had  been  a  valid 
tender  and  refusal."  (Van  Brocklen  v.  Smeallie,  140  N.  Y. 
70,  75.)  That  is,  "in  this  state,  in  such  a  case,  the  seller 
has  the  election  to  consider  the  property  his  own,  the  buyer 
having  forfeited  his  rights  under  the  contract,  or  as  belong- 
ing to  the  buyer."  (Mason  v.  Decker,  72  N.  Y.  595,  599.) 
See,  also,  Putnam  v.  Glidden,  159  Mass.  47;  Ackerman  v. 
Rubens,  167  N".  Y.  405,  and  53  L.  R.  A.  867 ;  Ballentine  v. 
Robinson,  46  Pa.  St.  177 ;  Shawhan  v.  Van  Nest,  25  Ohio 
St.  490 ;  Ames  v.  Moir,  130  111.  582 ;  Pratt  v.  Freeman  Mfg. 
Co.,  115  Wis.  648;  Ozark  Lumber  Co.  v.  Chicago  Lumber 
Co.,  51  Mo.  App.  555;  Burdick  on  Sales  (2d  ed.),  258; 
Mechem  on  Sales,  §  1681;  Uniform  Sales  Act,  §  61. 

Buyer  vs.  seller :  in  general. — "  The  range  of  these  remedies 

[of  buyer  against  seller]  will  necessarily  be  less  wide  than 
those  of  the  seller,  because  the  buyer  cannot  often  be  in  a 
situation  to  seek  remedies  against  the  goods,  but  must  usu- 
ally confine  himself  to  actions  against  the  seller  personally." 
(Mechem  on  Bales,  §  1714.) 

Section  66  of  the  Uniform  Sales  Act  provides,  that 
"  where  the  property  in  the  goods  has  passed  to  the  buyer 
and  the  sel!e1r~wrongTuny  neglects  or  refuses  to  ^deliver  the 
goods,  the  buyer  may  maintain  any  action  allowed  by  law  to 
the  owner  of  goods  of  similar  kind  when  wrongfully  con- 
verted or  withhelcL"  In  his  work  on  Sales,  §  594,  Professor 
Williston  says^  ^  This  section  is  not  contained  in  the  English 
Sale  of  Goods  Act,  though  it  expresses  undoubtedly  the  law 
of  England  as  well  as  of  this  country.  The  language  of  the 
section  is  broad  enough  to  include  actions  of  tort  for  the 
conversion  or  detention  of  the  property,  actions  of  replevin, 
and  also  actions  for  breach  of  the  seller's  contractual  obliga- 
tion to  deliver  the  goods." 

Buyer  vs.  seller:  where  title  has  passed,  damages  for 
breach  of  agreement  to  deliver. — "  If}  .  .  .,  the  seller, 
having  transferred  the  title,  wrongfully  refuses  to  deliver  the 
goods,  he  violates  his  contract;  and  while  the  buyer  has, 


198  SUMMARY  OF  SALES. 

.  .  .,  the  rights  of  an  owner  and  may  maintain  trover  or 
replevin,  he  has  also,  if  he  prefers  to  use  them,  the  remedies 
based  upon  the  breach  of  the  contract."  (Mechem  on  Sales, 
§  1784.) 

Viewing  a  sale  merely  as  a  completed  transaction,  and. 
not  as  a  contract,  the  buyer  would  have  no  such  contract 
remedy,  but  would  naturally  be  confined  to  the  remedies 
in  tort  based  upon  and  incidental  to  ownership  right.  Courts 
and  text-writers,  however,  uniformly  recognize  the  right  of 
the  buyer,  in  such  case,  to  the  remedy  based  upon  breach  of 
contract  to  deliver,  viewing  a  sale  as  a  contract  in  which,  as 
it  is  said,  "  the  seller  engages  to  do  two  main  things :  first, 
to  pass  the  property  in  the  thing  sold;  secondly,  to  deliver 
possession  of  it "  (Cockburn,  C.  J.,  in  Martineau  v.  Kitch- 
ing,  L.  R.  7  Q.  B.  436),  instead  of  a  merely  completed 
transaction. 

Same :  measure  of  damages. — "  By  the  total  breach  of  the 
seller's  undertaking  to  deliver  the  goods,  the  buyer  is  placed 
in  substantially  the  same  predicament  as  though  the  seller 
had  wholly  refused  to  sell  [had  refused  to  complete  his  con- 
tract to  sell].  He  loses  the  goods,  and  he  may  recover  upon 
the  basis  of  that  loss  —  if  he  has  paid  the  price,  the  full  value 
of  the  goods ;  if  he  has  not  paid  the  price,  the  difference  be- 
tween the  contract  price  and  the  value  of  the  goods;  if  the 
goods  were  sold  in  contemplation  of  a  special  use,  then  the 
value  for  the  use  so  contemplated  may  be  made  the  basis." 
(Mechem  on  Sales,  §  1785.) 

Buyer  vs.  seller:  where  title  has  passed,  trover  or  re- 
plevin— Where  title  has  passed  by  sale,  but  the  seller  refuses 
to  deliver  the  goods,  the  buyer,  if  he  be  not  in  default,  has 
the  right  incidental  to  ownership  to  maintain  replevin,  in 
order  to  obtain  possession  of  the  goods  of  which  he  is  owner, 
or  to  maintain  trover  or  conversion,  in  order  to  recover 
damages  therefor. 

Same:  measure  of  damages. — "The  buyer  to  whom  the 
property  has  passed,  if  not  in  default  at  the  time  of  the  con- 


REMEDIES.  199 

version,  that  is  to  say,  if  lve_  was  .then  entitled  to  .possession, 
may  maintain  an  action  in  trover  for  damages  for  the  con- 
version on  the  seller's  refusal  to  deliver,  as  well  as  an  action 
on  the  contract;  but  he  cannot  recover  greater  damages  by 
thus  suing  in  tort  than  by  suing  on  the  contract.  If,  there- 
lore,  the  seller's  conversion  was  before  delivery,  so  that  he 
cannot  maintain  an  action  for  the  price  —  e.  g.,  if  he  has 
resold  the  goods  to  a  third  person  —  the  damages  recoverable 
would  be  only  the  difference  between  the  contract  price  and 
the  market  value.  (Chinery  v.  Viall,  5  H.  &  N.  288.)  But 
if  the  seller's  right  of  action  for  the  recovery  of  the  price 
were  not  thus  lost,  as  if  he  had  delivered  the  goods  and  after- 
wards tortiously  retaken  and  converted  them,  the  buyer's 
right  of  recovery  in  trover  is  for  the  whole  value,  and  the 
seller  is  driven  to  his  cross-action  (Gillard  v.  Brittan,  8 
M.  &  W.  575)  or  counterclaim  for  the  price."  (Benjamin 
on  Sales  [5th  Eng.  ed.],  996.) 

The  measure  of  damages  in  an  action  for  conversion  is 
ordinarily  the  value  of  the  goods  at  the  time  of  the  conver- 
sion. (Griggs  v.  Day,  136  N.  Y.  152;  Kennedy  v.  Wkit- 
"weKTi  Pick.  466;  Wing  v.  Milliken,  91  Me.  387;  Beede  v. 
Lamprey,  64  N.  H.  510;  Crampton  v.  Marble  Co.,  60  Vt. 
291.) 

There  seems  to  have  been  a  tendency  to  make  an  exception 
in  favor  of  certain  goods,  such  as  stocks  and  other  securities, 
whose  value  often  fluctuates.  In  Douglas  v.  Kraft,  9  Cal. 
562,  563,  the  court  said:  "  The  rule  is,  when  the  property 
converted  has  a  fixed  value,  the  measure  of  damages  is  that 
value,  with  legal  interest  from  the  time  of  the  conversion; 
when  the  value  is  fluctuating,  the  plaintiff  may  recover  the 
highest  value  at  the  time  of  the  conversion,  or  at  any  time 
afterwards."  And  in  Cortelyou  v.  Lansing,  2  Games'  Cases 
in  Error,  200,  Kent,  J.,  said :  "  The  value  of  the  chattel,  at 
the  time  of  the  conversion,  is  not,  in  all  cases,  the  rule  of  dam- 
ages in  trover ;  if  the  thing  be  of  a  determinate  and  fixed  value, 
it  may  be  the  rule,  but  where  there  is  an  uncertainty,  or  fluctu- 
ation attending  the  value,  and  the  chattel  afterwards  rises  in 


200  SUMMARY  OF  SALES. 

value,  the  plaintiff  can  only  be  indemnified  by  giving  him 
the  price  of  it,  at  the  time  he  calls  upon  the  defendant  to 
restore  it,  and  one  of  the  cases  even  carries  the  value  down 
to  the  time  of  trial."  But,  in  Wright  v.  Bank  of  the  Metrap- 
olis,  110  N.  Y.  237,  249,  the  New  York  Court  of  Appeals 
said :  "  It  is  the  natural  and  proximate  loss  which  the  plain- 
tiff is  to  be  indemnified  for,  and  that  cannot  be  said  to  extend 
to  the  highest  price  before  trial,  but  only  to  the  highest  price 
reached  within  a  reasonable  time  after  the  plaintiff  has 
learned  of  the  conversion  of  his  stock  within  which  he  could 
go  into  the  market  and  repurchase  it."  And  the  United 
State  Supreme  Court,  in  Galigher  v.  Jones,  129  U.  S.  193, 
201,  has  adopted  the  New  York  rule,  saying:  "  The  hard- 
ship which  arose  from  estimating  the  damages  by  the  highest 
price  up  to  the  time  of  trial,  which  might  be  years  after  the 
transaction  occurred,  was  often  so  great  that  the  court  of 
appeals  of  New  York  was  constrained  to  introduce  a  material 
modification  in  the  form  of  the  rule,  and  to  hold  the  true 
and  just  measure  of  damages  in  these  cases  to  be  the  highest 
intermediate  value  of  the  stock  between  the  time  of  its  con- 
version and  a  reasonable  time  after  the  owner  has  received 
notice  of  it  to  enable  him  to  replace  the  stock.  ...  It 
would  be  a  herculean  task  to  review  all  the  various  and  con- 
flicting opinions  that  have  been  delivered  on  this  subject. 
On  the  whole  it  seems  to  us  that  the  New  York  rule,  as  finally 
settled  by  the  court  of  appeals,  has  the  most  reasons  in  its 
favor,  and  we  adopt  it  as  a  correct  view  of  the  law." 

Buyer  vs.  seller:  damages  for  breach  of  contract  to  sell. 
— Where  the  parties  have  made  a  contract  to  sell,  but  title 
has  not  passed,  and  the  seller  subsequently  refuses  to  perform, 
the  buyer  is  limited,  as  a  rule,  to  an  action  for  damages  for 
breach  of  the  contract. 

Same :  measure  of  damages. —  In  such  case,  "  the  general 
rule  of  damages,  ordinarily,  is  the  difference  between  the 
contract  price  and  the  market  value  of  the  article  at  the  time 
and  place  of  delivery  fixed  by  the  contract.  This  is  not  the 


REMEDIES.  201 

invariable  rule  in  all  cases.  The  general_rule  is^  that  Jhe_ 
party  injured  by  a  breach  of  a  ^rmf^H^jj^PTiti+lQH  *A  T^nypt 

all  liis  damages,  including  gains  prevented  as  well  as  losses 
sustained,  provided  they  are  certain,  and  such  as  might 
naturally  be  expected  to  follow  the  breach.  In  commodities 
commonly  purchasable  in  the  market,  it  is  safe  to  say  that 
the  purchaser  is  made  whole,  when  he  is  allowed  to  recover 
the  difference  between  the  contract  price  and  the  value  of 
the  article  in  the  market  at  the  time  and  place  of  delivery; 
because  he  can  supply  himself  with  this  article  by  going 
into  the  market  and  making  his  purchase  at  such  price,  and 
these  are  all  the  damages  he  is  ordinarily  entitled  to  recover, 
for  nothing  beyond  this  is  within  the  contemplation  of  the 
parties  when  they  entered  into  the  contract. 

"  This  rule,  however,  is  changed  when  the  vendor  knows 
that  the  purchaser  has  an  existing  contract  for  a  resale  at  an 
advanced  price,  and  that  the  purchase  is  made  to  fulfill 
such  contract,  and  the  vendor  agrees  to  supply  the  article 
to  enable  him  to  fulfill  the  same,  because  those  profits  which 
would  accrue  to  the  purchaser  upon  fulfilling  the  contract 
of  resale,  may  justly  be  said  to  have  entered  into  the  con- 
templation of  the  parties  in  making  the  contract.  (Griffin  v. 
Colver,  16  N".  Y.  493.)  This  rule  is  based  upon  reason  and 
good  sense,  and  is  in  strict  accordance  with  the  plainest  prin- 
ciples of  justice.  It  affirms  nothing  more  than  that  where 
a  party  sustains  a  loss  by  reason  of  a  breach  of  a  contract, 
Tie  shall,  so  far  as  money  can  do  it,  be  placed  in  the  same 
situation  with  respect  to  damages,  as  if  the  contract  had  been 
performed."  (Messmore  v.  The  N.  Y.  Shot  &  Lead  Co., 

TOTYriia,  427.) 

See  section  67  of  the  Uniform  Sales  Act. 

Buyer  vs.  seller :  specific  performance. — "  If  damages  are 
an  adequate  remedy,  a  court  of  equity  will  never  grant 
specific  performance,  and  it  has  been  held,  with  perhaps  too 
great  stringency,  that  for  breach  of  contracts  for  the  sale  of 
goods  damages  are,  as  a  rule,  an  adequate  remedy.  In  a 


202  SUMMARY  OF  SALES. 

few  exceptional  cases,  however,  specific  performance  has 
been  granted,  as  for  slaves,  works  of  art,  heirlooms  and  prop- 
erty valuable  for  sentimental  reasons,  vessels,  valuable  docu- 
ments of  various  kinds.  Much  litigation  has  arisen  in  re- 
gard to  the  right  to  demand  specific  performance  of  a  con- 
tract to  sell  stock.  In  England,  though  a  contract  for  the 
sale  of  government  bonds  (or  stock,  as  it  is  called  in  Eng- 
land), is  not  specifically  enforcible  because  such  securities 
are  always  to  be  had  by  any  person  in  the  market,  a  con- 
tract for  the  sale  of  shares  in  a  corporation  is  specifically 
enforcible.  In  the  United  States  the  test  adopted  is  whether 
the  shares  can  readily  be  secured  in  the  market;  if  not, 
specific  performance  is  allowed,  but  otherwise  relief  must 
be  sought  in  an  action  at  law  for  damages.  A  contract  for 
the  sale  of  a  patent  will  be  specifically  enforced,  or  a  copy- 
right. In  some  cases,  though  goods  may  of  themselves  not 
be  of  a  kind  which  would  ordinarily  induce  a  court  of  equity 
to  give  specific  performance,  the  importance  of  the  goods  in 
the  particular  case,  and  the  difficulty  of  acquiring  them, 
except  through  the  defendant,  will  induce  the  court  to  decree 
specific  performance."  (Williston  on  Sales,  §  602,  and  cases 
therein  cited.) 

See  section  68  of  the  Uniform  Sales  Act. 


APPENDIX. 


PREFACE  TO  UNIFORM  SALES  ACT. 


The  first  tentative  draft  of  the  Uniform  Sales  Act  was 
prepared  in  1902-3,  by  Professor  Samuel  Williston  of  the 
Harvard  Law  School,  at  the  request  of  the  Commissioners  of 
Uniform  Laws  in  National  Conference.  It  was  printed  in 
the  summer  of  1903  and  distributed  with  a  request  for 
criticisms.  Some  were  received,  and  in  the  light  of  these  a 
second  tentative  draft  was  presented  to  the  Commissioners 
at  theii  meeting  at  St.  Louis,  September  22,  23  and  24,  1904. 
The  draft  was  then  gone  over,  section  by  section,  by  the 
Commissioners.  Doubtful  points  and  changes  in  wording 
were  discussed  and  voted  upon.  The  draft  was  then  recom- 
mitted to  the  Committee  on  Commercial  Law,  with  instruc- 
tions to  embody  the  changes  adopted  by  the  Commissioners 
and  to  present  a  third  tentative  draft  at  the  meeting  of  the 
Commissioners  in  August,  1905. 

A  third  draft  was  presented,  in  accordance  with  these 
instructions,  at  the  meeting  of  the  Commissioners  at  Narra- 
gansett  Pier  in  August,  1905.  This  draft  included  for  the 
first  time  a  number  of  sections  on  documents  of  title  (Sections 
27-40  of  the  Act  as  finally  adopted).  Because  of  these 
sections/  it  was  thought  best  once  more  to  recommit  the  draft. 

At  the  meeting  of  the  Conference  in  St.  Paul  in  August, 
1906,  the  final  draft  was  adopted  and  recommended  to  the 
legislatures  of  the  several  states  for  passage.  It  has  since 
been  enacted  in  the  six  States  and  Territories  of  Arizona, 
Connecticut,  Massachusetts,  New  Jersey,  Ohio  and  Rhode 
Island.*  FEANCIS  B.  JAMES, 

Chairman  of  Committee  on  Commercial  Law. 
Cincinnati,  Ohio,  January  1,  1910. 

•  Maryland  and  Mew  York  have  since  also  enacted  it. 
[203] 


204  SUMMAEY  OF  SAI.ES. 


AN  ACT  TO  MAKE  UNIFORM  THE  LAW  OF 
SALES  OF  GOODS.* 


PART  I. 
FORMATION  OF  THE  CONTRACT. 

Section  1.  Contracts  to  sell  and  sales. —  (1)  A  contract 
to  sell  goods  is  a  contract  whereby  the  seller  agrees  to  trans- 
fer the  property  in  goods  to  the  buyer  for  a  consideration 
called  the  price. 

(2)  A  sale  of  goods  is  an  agreement  whereby  the  seller 
transfers  the  property  in  goods  to  the  buyer  for  a  considera- 
tion called  the  price. 

(3)  A  contract  to   sell   or   a  sale  may  be   absolute   or 
conditional. 

(T)  There  may  be  a  contract  to  sell  or  a  sale  between  one 
part  owner  and  another. 

§  2.  Capacity  —  liabilities  for  necessaries. —  Capacity  to 
buy  and  sell  is  regulated  by  the  general  law  concerning 
capacity  to  contract,  and  to  transfer  and  acquire  property. 

Where  necessaries  are  sold  and  delivered  to  an  infant, 
or  to  a  person  who  by  reason  of  mental  incapacity  or  drunk- 
enness is  incompetent  to  contract,  he  must  pay  a  reasonable 
price  therefor. 

Necessaries  in  this  section  mean  goods  suitable  to  the 
condition  in  life  of  such  infant  or  other  person,  and  to  his 
actual  requirements  at  the  time  of  delivery. 

FORMALITIES  OF  THE  CONTRACT. 
§  3.  Form  of  contract  or  sale. —  Subject  to  the  provisions 
of  this  act  and  of  any  statute  in  that  behalf,  a  contract  to 
sell  or  a  sale  may  be  made  in  writing  (either  with  or  without 

*  As  prepared  under  the  direction  of  and  recommended  by  the  Com- 
missioners on  Uniform  State  Laws,  and  as  published  by  The  W.  H. 
Anderson  Co.,  Cincinnati,  Ohio,  in  1910,  in  its  collection  of  American 
Uniform  Commercial  Acts. 


APPENDIX.  205 

seal),  or  by  word  of  mouth,  or  partly  in  writing  and  partly 
by  word  of  mouth,  or  may  be  inferred  from  the  conduct  of 
the  parties. 

§  4.  Statute  of  frauds.—  (1)  A  contract  to  sell  or  a  sale 
of  any  goods  or  choses  in  action  of  the  value  of  five  hundred 
dollars  or  upwards  shall  not  be  enforceable  by  action  unless 
the  buyer  shall  accept  part  of  the  goods  or  choses  in  action 
so  contracted  to  be  sold  or  sold,  and  actually  receive  the  same, 
or  give  something  in  earnest  to  bind  the  contract,  or  in  part 
payment,  or  unless  some  note  or  memorandum  in  writing  of 
the  contract  or  sale  be  signed  by  the  party  to  be  charged  or 
his  agent  in  that  behalf. 

(2)  The  provisions  of  this  section  apply  to  every  such 
contract  or  sale,   notwithstanding  that  the  goods   may  be 
intended  to  be  delivered  at  some  future  time  or  may  not 
at  the  time  of  such  contract  or  sale  be  actually  made,  pro- 
cured, or  provided,  or  fit  or  ready  for  delivery,  or  some  act 
may  be   requisite  for   the   making  or  completing   thereof, 
or  rendering  the  same  fit  for  delivery;  but  if  the  goods 
are  to  be  manufactured  by  the  seller  especially  for  the 
buyer  and  are  not  suitable  for  sale  to  others  in  the  ordi- 
nary course  of  the  seller's  business,  the  provisions  of  this 
section  shall  not  apply. 

(3)  There  is  an  acceptance  of  goods  within  the  mean- 
ing of  this  section  when  the  buyer,  either  before  or  after 
delivery  of  the  goods,  expresses  by  words  or  conduct  his 
assent  to  becoming  the  owner  of  those  specific  goods. 

SUBJECT  MATTER  OF  CONTRACT. 

§  5.  Existing  and  future  goods. —  (1)  The  goods  which 
form  the  subject  of  a  contract  to  sell  may  be  either  existing 
goods,  owned  or  possessed  by  the  seller,  or  goods  to  be  manu- 
factured or  acquired  by  the  seller  after  the  making  of  the 
contract  to  sell,  in  this  act  called  "  future  goods." 

(2)  There  may  be  a  contract  to  sell  goods,  the  acqui- 
sition of  which  by  the  seller  depends  upon  a  contingency 
which  may  or  may  not  happen. 


206  SUMMARY  OF  SALES. 

(3)  Where  the  parties  purport  to  effect  a  present  sale 
of  future  goods,  the  agreement  operates  as  a  contract  to  sell 
the  goods. 

§  6.  Undivided  shares. — (1)  There  may  be  a  contract  to 
sell  or  a  sale  of  an  undivided  share  of  goods.  If  the  parties 
intend  to  effect  a  present  sale,  the  buyer,  by  force  of  the 
agreement,  becomes  an  owner  in  common  with  the  owner  or 
owners  of  the  remaining  shares. 

(2)  In  the  case  of  fungible  goods,  there  may  be  a  sale  of 
an  undivided  share  of  a  specific  mass,  though  the  seller 
purports  to  sell  and  the  buyer  to  buy  a  definite  number, 
weight  or  measure  of  the  goods  in  the  mass,  and  though 
the  number,  weight  or  measure  of  the  goods  in  the  mass 
is  undetermined.  By  such  a  sale  the  buyer  becomes  owner 
in  common  of  such  a  share  of  the  mass  as  the  number, 
weight  or  measure  bought  bears  to  the  number,  weight 
or  measure  of  the  mass.  If  the  mass  contains  less  than 
the  number,  weight  or  measure  bought,  the  buyer  becomes 
the  owner  of  the  whole  mass  and  the  seller  is  bound  to  make 
good  the  deficiency  from  similar  goods  unless  a  contrary 
intent  appears. 

§  7.  Destruction  of  goods  sold. —  (1)  Where  the  parties 
purport  to  sell  specific  goods,  and  the  goods  without  the 
knowledge  of  the  seller  have  wholly  perished  at  the  time 
when  the  agreement  is  made,  the  agreement  is  void. 

(2)  Where  the  parties  purport  to  sell  specific  goods,  and 
the  goods  without  the  knowledge  of  the  seller  have  perished 
in  part  or  have  wholly  or  in  a  material  part  so  deteriorated 
in  quality  as  to  be  substantially  changed  in  character,  the 
buyer  may  at  his  option  treat  the  sale  — 

(a)  As  avoided,  or 

(b)  As  transferring  the  property  in  all  of  the  existing 
goods  or  in  so  much  thereof  as  have  not  deteriorated,  and 
as  binding  the  buyer  to  pay  the  full  agreed  price  if  the  sale 
was  indivisible,  or  to  pay  the  agreed  price  for  the  goods  in 
which  the  property  passes  if  the  sale  was  divisible. 


APPENDIX.  207 

§  8.  Destruction  of  goods  contracted  to  be  sold. —  (1) 
Where  there  is  a  contract  to  sell  specific  goods,  and  subse- 
quently, but  before  the  risk  passes  to  the  buyer,  without  any 
fault  on  the  part  of  the  seller  or  the  buyer,  the  goods  wholly 
perish,  the  contract  is  thereby  avoided. 

(2)  Where  there  is  a  contract  to  sell  specific  goods,  and 
subsequently,  but  before  the  risk  passes  to  the  buyer,  with- 
out any  fault  of  the  seller  or  the  buyer,  part  of  the  goods 
perish  or  the  whole  or  a  material  part  of  the  goods  so  deteri- 
orate in  quality  as  to  be  substantially  changed  in  character, 
the  buyer  may  at  his  option  treat  the  contract  — 

(a)  As  avoided,  or 

(b)  As  binding  the  seller  to  transfer  the  property  in 
all  of  the  existing  goods  or  in  so  much  thereof  as  have  not 
deteriorated,    and    as   binding   the   buyer   to   pay   the   full 
agreed  price  if  the  contract  was  indivisible,  or  to  pay  the 
agreed  price  for  so  much  of  the  goods  as  the  seller,  by  the 
buyer's  option,   is  bound   to   transfer  if  the  contract  was 
divisible. 

THE  PRICE. 

§  9.  Definition  and  ascertainment  of  price. —  (1)  The 
price  may  be  fixed  by  the  contract,  or  may  be  left  to  be  fixed 
in  such  manner  as  may  be  agreed,  or  it  may  be  determined 
by  the  course  of  dealing  between  the  parties. 

(2)  The  price  may  be  made  payable  in  any  personal 
property. 

(3)  Where   transferring   or   promising   to   transfer    any 
interest  in  real  estate  constitutes  the  whole  or  part  of  the 
consideration  for  transferring  or  for  promising  to  transfer 
the  property  in  goods,  this  act  shall  not  apply. 

(4)  Where  the  price  is  not  determined  in  accordance  with 
the  foregoing  provisions  the  buyer  must  pay  a  reasonable 
price.     What  is   a  reasonable  price  is  a  question  of  fact 
dependent  on  the  circumstances  of  each  particular  case. 

§  10.  Sale  at  a  valuation. —  (1)  Where  there  is  a  con- 
tract to  sell  or  a  sale  of  goods  at  a  price  or  on  terms  to  be 
fixed  by  a  third  person,  and  such  third  person  without  fault 


208  SUMMAEY    OF    SALES. 

of  the  seller  or  the  buyer,  cannot  or  does  not  fix  the  price  or 
terms,  the  contract  or  the  sale  is  thereby  avoided ;  but  if  the 
goods  or  any  part  thereof  have  been  delivered  to  and  appro- 
priated by  the  buyer  he  must  pay  a  reasonable  price  therefor. 
(2)  Where  such  third  person  is  prevented  from  fixing 
the  price  or  terms  by  fault  of  the  seller  or  the  buyer,  the 
party  not  in  fault  may  have  such  remedies  against  the  party 
in  fault  as  are  allowed  by  Parts  IV  and  V  of  this  act. 

CONDITIONS  AND  WARRANTIES. 

§  11.  Effect  of  conditions. —  (1)  Where  the  obligation  of 
either  party  to  a  contract  to  sell  or  a  sale  is  subject  to  any 
condition  which  is  not  performed,  such  party  may  refuse  to 
proceed  with  the  contract  or  sale  or  he  may  waive  perform- 
ance of  the  condition.  If  the  other  party  has  promised  that 
the  condition  should  happen  or  be  performed,  such  first 
mentioned  party  may  also  treat  the  non-performance  of 
the  condition  as  a  breach  of  warranty. 

(2)  Where  the  property  in  the  goods  has  not  passed,  the 
buyer  may  treat  the  fulfillment  by  the  seller  of  his  obligation 
to  furnish  goods  as  described  and  as  warranted  expressly  or 
by  implication  in  the  contract  to  sell  as  a  condition  of  the 
obligation  of  the  buyer  to  perform  his  promise  to  accept 
and  pay  for  the  goods. 

§  12.  Definition  of  express  warranty.  Any  affirmation 
of  fact  or  any  promise  by  the  seller  relating  to  the  goods  is 
an  express  warranty  if  the  natural  tendency  of  such  affirma- 
tion or  promise  is  to  induce  the  buyer  to  purchase  the  goods, 
and  if  the  buyer  purchases  the  goods  relying  thereon.  No 
affirmation  of  the  value  of  the  goods,  nor  any  statement  pur- 
porting to  be  a  statement  of  the  seller's  opinion  only  shall 
be  construed  as  a  warranty. 

§  13.  Implied  warranties  of  title. —  In  a  contract  to  sell 
or  a  sale,  unless  a  contrary  intention  appears,  there  is  — 

(1)  An  implied  warranty  on  the  part  of  the  seller  that 
in  case  of  a  sale  he  has  a  right  to  sell  the  goods,  and  that 


APPENDIX.  209 

in  case  of  a  contract  to  sell  he  will  have  a  right  to  sell  the 
goods  at  the  time  when  the  property  is  to  pass; 

(2)  An  implied  warranty  that  the  buyer  shall  have  and 
enjoy  quiet  possession  of  the  goods  as  against  any  lawful 
claims  existing  at  the  time  of  the  sale; 

(3)  An  implied  warranty  that  the  goods  shall  be  free 
at  the  time  of  the  sale  from  any  charge  or  encumbrance 
in  favor  of  any  third  person,  not  declared  or  known  to  the 
buyer  before  or  at  the  time  when  the  contract  or  sale  is 
made. 

(4)  This  section  shall  not,  however,  be  held  to  render 
liable  a  sheriff,  auctioneer,  mortgagee,  or  other  person  pro- 
fessing to  sell  by  virtue  of  authority  in  fact  or  law  goods  in 
which  a  third  person  has  a  legal  or  equitable  interest. 

§  14.  Implied  warranty  in  sale  by  description. —  Where 
there  is  a  contract  to  sell  or  a  sale  of  goods  by  description, 
there  is  an  implied  warranty  that  the  goods  shall  correspond 
with  the  description  and  if  the  contract  or  sale  be  by  sample, 
as  well  as  by  description,  it  is  not  sufficient  that  the  bulk  of 
the  goods  corresponds  with  the  sample  if  the  goods  do  not 
also  correspond  with  the  description. 

§  15.  Implied  warranties  of  quality.  Subject  to  the  pro- 
visions of  this  act  and  of  any  statute  in  that  behalf,  there 
is  no  implied  warranty  or  condition  as  to  the  quality  or 
fitness  for  any  particular  purpose  of  goods  supplied  under 
a  contract  to  sell  or  a  sale,  except  as  follows : 

(1)  Where  the  buyer,  expressly  or  by  implication,  makes 
known  to  the  seller  the  particular  purpose  for  which  the 
goods  are  required,  and  it  appears  that  the  buyer  relies  on 
the  seller's  skill  or  judgment  (whether  he  be  the  grower  or 
manufacturer  or  not),  there  is  an  implied  warranty  that  the 
goods  shall  be  reasonably  fit  for  such  purpose. 

(2)  Where  the  goods  are  bought  by  description  from  a 
seller  who  deals  in  goods  of  that  description  (whether  he  be 
the  grower  or  manufacturer  or  not),  there  is  an  implied 
warranty  that  the  goods  shall  be  of  merchantable  quality. 

14 


210  SUMMARY  OF  SALES. 

(3)  If  the  buyer  has  examined  the  goods,  there  is  no 
implied  warranty  as  regards  defects  which  such  examination 
ought  to  have  revealed. 

(4)  In  the  case  of  a  contract  to  sell  or  a  sale  of  a  specified 
article  under  its  patent  or  other  trade  name,  there  is  no 
implied  warranty  as  to  its  fitness  for  any  particular  purpose. 

(5)  An  implied  warranty  or  condition  as  to  quality  or 
fitness  for   a  particular  purpose  may  be   annexed  by  the 
us-age  of  trade. 

(6)  An  express  warranty  or  condition  does  not  negative  a 
warranty  or  condition  implied  under  this  act  unless  incon- 
sistent therewith. 

SALE  BY  SAMPLE. 

§  16.  Implied  warranties  in  sale  by  sample. —  In  the 
case  of  a  contract  to  sell  or  a  sale  by  sample: 

(a)  There  is  an  implied  warranty  that  the  bulk  shall 
correspond  with  the  sample  in  quality. 

(b)  Tnere  is  an  implied  warranty  that  the  buyer  shall 
have  a  reasonable  opportunity  of  comparing  the  bulk  with 
the  sample,  except  so  far  as  otherwise  provided  in  section 
47  (3). 

(c)  If  the  seller  is  a  dealer  in  goods  of  that  kind,  there 
is  an  implied  warranty  that  the  goods  shall  be  free  from 
any  defect   rendering  them   unmerchantable  which   would 
not  be  apparent  on  reasonable  examination  of  the  sample. 

PART  II. 

TRANSFER  OF  PROPERTY  AS  BETWEEN  SELLER  AND 

BUYER. 

§  IT.  No  property  passes  until  goods  are  ascertained. — 
Where  there  is  a  contract  to  sell  unascertained  goods  no  prop- 
erty in  the  goods  is  transferred  to  the  buyer  unless  and  until 
the  goods  are  ascertained,  but  property  in  an  undivided 
share  of  ascertained  goods  may  be  transferred  as  provided 
in  section  6. 


APPENDIX.  211 

§  18.  Property  in  specific  goods  passes  when  parties  so 
intend. — (1)  Where  there  is  a  contract  to  sell  specific  or 
ascertained  goods,  the  property  in  them  is  transferred  to  the 
buyer  at  such  time  as  the  parties  to  the  contract  intend  it 
to  be  transferred. 

(2)  For  the  purpose  of  ascertaining  the  intention  of  the 
parties,  regard  shall  be  had  to  the  terms  of  the  contract,  the 
conduct  of  the  parties,  usages  of  trade  and  the  circumstances 
of  the  case. 

§  19.  Rules  for  ascertaining  intention. —  Unless  a  dif- 
ferent intention  appears,  the  following  are  rules  for  ascer- 
taining the  intention  of  the  parties  as  to  the  time  at  which 
the  property  in  the  goods  is  to  pass  to  the  buyer. 

Rule  1. —  Where  there  is  an  unconditional  contract  to 
sell  specific  goods,  in  a  deliverable  state,  the  property  in  the 
goods  passes  to  the  buyer  when  the  contract  is  made  and 
it  is  immaterial  whether  the  time  of  payment,  or  the  time 
of  delivery,  or  both,  be  postponed. 

Rule  2. —  Where  there  is  a  contract  to  sell  specific 
goods  and  the  seller  is  bound  to  do  something  to  the  goods, 
for  the  purpose  of  putting  them  into  a  deliverable  state, 
the  property  does  not  pass  until  such  thing  be  done. 

Rule  3. —  (1)  When  goods  are  delivered  to  the  buyer 
"  on  sale  or  return,"  or  on  other  terms  indicating  an  in- 
tention to  make  a  present  sale,  but  to  give  the  buyer  an 
option  to  return  the  goods  instead  of  paying  the  price, 
the  property  passes  to  the  buyer  on  delivery,  but  he  may 
revest  the  property  in  the  seller  by  returning  or  tendering 
the  goods  within  the  time  fixed  in  the  contract,  or,  if  no 
time  has  been  fixed,  within  a  reasonable  time. 

(2)  When  goods  are  delivered  to  the  buyer  on  approval 
or  on  trial  or  on  satisfaction,  or  other  similar  terms,  the 
property  therein  passes  to  the  buyer  — 

(a)  When    he    signifies    his    approval    or    acceptance    to 
the  seller  or  does  any  other  act  adopting  the  transaction; 

(b)  If  he  does  not  signify  his  approval  or  acceptance 
to  the  seller,  but  retains  the  goods  without  giving  notice 


212  SUMMARY  OF  SALES. 

of  rejection,  then  if  a  time  has  been  fixed  for  the  return 
of  the  goods,  on  the  expiration  of  such  time,  and,  if  no 
time  has  been  fixed,  on  the  expiration  of  a  reasonable  time. 
What  is  a  reasonable  time  is  a  question  of  fact. 

Rule  4. —  (1)  Where  there  is  a  contract  to  sell  unas- 
certained or  future  goods  by  description,  and  goods  of 
that  description  and  in  a  deliverable  state  are  uncondi- 
tionally appropriated  to  the  contract,  either  by  the  seller 
with  the  assent  of  the  buyer,  or  by  the  buyer  with  the  assent 
of  the  seller,  the  property  in  the  goods  thereupon  passes  to 
the  buyer.  Such  assent  may  be  expressed  or  implied,  and 
may  be  given  either  before  or  after  the  appropriation  is 
made. 

(2)  Where,  in  pursuance  of  a  contract  to  sell,  the  seller 
delivers  the  goods  to  the  buyer,  or  to  a  carrier  or  other  bailee 
(whether  named  by  the  buyer  or  not)  for  the  purpose  of 
transmission  to  or  holding  for  the  buyer,  he  is  presumed 
to  have  unconditionally  appropriated  the  goods  to  the  con- 
tract, except  in  the  cases  provided  for  in  the  next  rule  and 
in  section  20.  This  presumption  is  applicable,  although  by 
the  terms  of  the  contract,  the  buyer  is  to  pay  the  price  before 
receiving  delivery  of  the  goods,  and  the  goods  are  marked 
with  the  words  "  collect  on  delivery  "  or  their  equivalents. 

Rule  5. —  If  the  contract  to  sell  requires  the  seller  to 
deliver  the  goods  to  the  buyer,  or  at  a  particular  place,  or 
to  pay  the  freight  or  cost  of  transportation  to  the  buyer, 
or  to  a  particular  place,  the  property  does  not  pass  until 
the  goods  have  been  delivered  to  the  buyer  or  reached  the 
place  agreed  upon. 

§  20.  Reservation  of  right  of  possession  or  property 
when  goods  are  shipped. —  (1)  Where  there  is  a  contract  to 
sell  specific  goods,  or  where  goods  are  subsequently  appro- 
priated to  the  contract,  the  seller  may,  by  the  terms  of  the 
contract  or  appropriation,  reserve  the  right  of  possession  or 
property  in  the  goods  until  certain  conditions  have  been 
fulfilled.  The  right  of  possession  or  property  may  be  thus 
reserved  notwithstanding  the  delivery  of  the  goods  to  the 


APPENDIX.  2 13 

buyer  or  to  a  carrier  or  other  bailee  for  the  purpose  of  trans- 
mission to  the  buyer. 

(2)  Where  goods  are  shipped,  and  by  the  bill  of  lading 
the  goods  are  deliverable  to  the  seller  or  his  agent,  or  to 
the  order  of  the  seller  or  of  his  agent,  the  seller  thereby 
reserves  the  property  in  the  goods.     But  if,  except  for  the 
form  of  the  bill  of  lading,  the  property  would  have  passed 
to  the  buyer  on  shipment  of  the  goods,  the  seller's  property 
in  the  goods  shall  be  deemed  to  be  only  for  the  purpose  of 
securing  performance  by  the  buyer  of  his  obligations  under 
the  contract. 

(3)  Where  goods  are  shipped,  and  by  the  bill  of  lading  the 
goods  are  deliverable  to  the  order  of  the  buyer  or  of  his  agent, 
but  possession  of  the  bill  of  lading  is  retained  by  the  seller 
or  his  agent,  the  seller  thereby  reserves  a  right  to  the  pos- 
session of  the  goods  as  against  the  buyer. 

(4)  Where  the  seller  of  goods  draws  on  the  buyer  for 
the  price  and  transmits  the  bill  of  exchange  and  bill  of  lading 
together  to  the  buyer  to  secure  acceptance  or  payment  of  the 
bill  of  exchange,  the  buyer  is  bound  to  return  the  bill  of 
lading  if  he  does  not  honor  the  bill  of  exchange,  and  if  he 
wrongfully  retains  the  bill  of  lading  he  acquires  no  added 
right  thereby.     If,  however,  the  bill  of  lading  provides  that 
the  goods  are  deliverable  to  the  buyer  or  to  the  order  of  the 
buyer,  or  is  indorsed  in  blank,  or  to  the  buyer  by  the  con- 
signee named  therein,  one  who  purchases  in  good  faith,  for 
value,  the  bill  of  lading,  or  goods  from  the  buyer  will  obtain 
the  property  in  the  goods,  although  the  bill  of  exchange  has 
not  been  honored,  provided  that  such  purchaser  has  received 
delivery  of  the  bill  of  lading  indorsed  by  the  consignee 
named  therein,  or  of  the  goods,  without  notice  of  the  facts 
making  the  transfer  wrongful. 

§  21.  Sale  by  auction. —  In  the  case  of  sale  by  auction  — 

(1)  Where  goods  are  put  up  for  sale  by  auction  in  lots, 
each  lot  is  the  subject  of  a  separate  contract  of  sale. 

(2)  A  sale  by  auction  is  complete  when  the  auctioneer 
announces  its  completion  by  the  fall  of  the  hammer,  or  in 


214:  SUMMARY  OF  SALES. 

other  customary  manner.  Until  such  announcement  is 
made,  any  bidder  may  retract  his  bid;  and  the  auctioneer 
may  withdraw  the  goods  from  sale  unless  the  auction  has 
been  announced  to  be  without  reserve. 

(3)  A  right  to  bid  may  be  reserved  expressly  by  or  on 
behalf  of  the  seller. 

(4)  Where  notice  has  not  been  given  that  a  s;ale  by  auction 
is  subject  to  a  right  to  bid  on  behalf  of  the  seller,  it  shall 
not  be  lawful  for  the  seller  to  bid  himself  or  to  employ  or 
induce  any  person  to  bid  at  such  sale  on  his  behalf,  or  for 
the  auctioneer  to  employ  or  induce  any  person  to  bid  at  such 
sale  on  behalf  of  the  seller  or  knowingly  to  take  any  bid 
from  the  seller  or  any  person  employed  by  him.     Any  sale 
contravening  this  rule  may  be  treated  as  fraudulent  by  the 
.buyer. 

§  22.  Risk  of  loss. —  Unless  otherwise  agreed,  the  goods 
remain  at  the  seller's  risk  until  the  property  therein  is  trans- 
ferred to  the  buyer,  but  when  the  property  therein  is  trans- 
ferred to  the  buyer  the  goods  are  at  the  buyer's  risk  whether 
delivery  has  been  made  or  not,  except  that  — 

(a)  Where  delivery  of  the  goods  has  been  made  to  the 
buyer,  or  to  a  bailee  for  the  buyer,  in  pursuance  of  the  con- 
tract and  the  property  in  the  goods  has  been  retained  by  the 
seller  merely  to  secure  performance  by  the  buyer  of  his 
obligations  under  the  contract,  the  goods  are  at  the  buyer's 
risk  from  the  time  of  such  delivery. 

(b)  Where  delivery  has  been  delayed  through  the  fault  of 
either  buyer  or  seller  the  goods  are  at  the  risk  of  the  party 
in  fault  as  regards  any  loss  which  might  not  have  occurred 
but  for  such  fault. 

TRANSFER  OF  TITLE. 

§  23.  Sale  by  a  person  not  the  owner. —  (1)  Subject  to 
the  provisions  of  this  act,  where  goods  are  sold  by  a  person 
who  is  not  the  owner  thereof,  and  who  does  not  sell  them 
under  the  authority  or  with  the  consent  of  the  owner,  the 


APPENDIX.  215 

buyer  acquires  no  better  title  to  the  goods  than  the  seller 
had,  unless  the  owner  of  the  goods  is  by  his  conduct  pre- 
cluded from  denying  the  seller's  authority  to  sell. 
(2)  Nothing  in  this  act,  however,  shall  affect  — 

(a)  The  provisions  of  any  factors'  acts,  recording  acts, 
or  any  enactment  enabling  the  apparent  owner  of  goods  to 
dispose  of  them  as  if  he  were  the  true  owner  thereof. 

(b)  The  validity  of  any  contract  to  sell  or  sale  under  any 
special  common  law  or  statutory  power  of  sale  or  under  the 
order  of  a  court  of  competent  jurisdiction. 

§  24.  Sale  by  one  having  a  voidable  title. —  Where  the 
seller  of  goods  has  a  voidable  title  thereto,  but  his  title  has 
not  been  avoided  at  the  time  of  the  sale,  the  buyer  acquires 
a  good  title  to  the  goods,  provided  he  buys  them  in  good  faith, 
for  value,  and  without  notice  of  the  seller's  defect  of  title. 

§  25.  Sale  by  seller  in  possession  of  goods  already  sold. 
—  Where  a  person  having  sold  goods  continues  in  possession 
of  the  goods,  or  of  negotiable  documents  of  title  to  the  goods, 
the  delivery  or  transfer  by  that  person,  or  by  an  agent  acting 
for  him,  of  the  goods  or  documents  of  title  under  any  sale, 
pledge,  or  other  disposition  thereof,  to  any  person  receiving 
and  paying  value  for  the  same  in  good  faith  and  without 
notice  of  the  previous  sale,  shall  have  the  same  effect  as  if 
the  person  making  the  delivery  or  transfer  were  expressly 
authorized  by  the  owner  of  the  goods  to  make  the  same. 

§  26.  Creditors'  rights  against  sold  goods  in  seller's 
possession. —  Where  a  person  having  sold  goods  continues 
in  possession  of  the  goods,  or  of  negotiable  documents  of  title 
to  the  goods  and  such  retention  of  possession  is  fraudulent 
in  fact  or  is  deemed  fraudulent  under  any  rule  of  law,  a 
creditor  or  creditors  of  the  seller  may  treat  the  sale  as  void. 

§  27.  Definition  of  negotiable  documents  of  title. — A 
document  of  title  in  which  it  is  stated  that  the  goods  referred 
to  therein  will  be  delivered  to  the  bearer,  or  to  the  order 
of  any  person  named  in  such  document  is  a  negotiable  docu- 
ment of  title. 


216  SUMMARY  OF  SALES. 

§  28.  Negotiation  of  negotiable  documents  by  delivery — 
A  negotiable  document  of  title  may  be  negotiated  by  de- 
livery,— 

(a)  Where  by  the  terms  of  the  document  the  carrier, 
warehouseman  or  other  bailee  issuing  the  same  undertakes 
to  deliver  the  goods  to  the  bearer,  or 

(b)  Where  by  the  terms  of  the  document  the  carrier, 
warehouseman  or  other  bailee  issuing  the  same  undertakes 
to  deliver  the  goods  to  the  order  of  a  specified  person,  and 
such  a  person  or  a  subsequent  indorsee  of  the  document  has 
indorsed  it  in  blank  or  to  bearer. 

Where  by  the  terms  of  a  negotiable  document  of  title  the 
goods  are  deliverable  to  bearer  or  where  a  negotiable  docu- 
ment of  title  has  been  indorsed  in  blank  or  to  bearer,  any 
holder  may  indorse  the  same  to  himself  or  to  any  other 
specified  person,  and  in  such  case  the  document  shall  there- 
after be  negotiated  only  by  the  indorsement  of  such  indorsee. 

§  29.  Negotiation  of  negotiable  documents  by  indorse- 
ment.— A  negotiable  document  of  title  may  be  negotiated 
by  the  indorsement  of  the  person  to  whose  order  the  goods 
are  by  the  terms  of  the  document  deliverable.  Such  indorse- 
ment may  be  in  blank,  to  bearer  or  to  a  specified  person.  If 
indorsed  to  a  specified  person,  it  may  be  again  negotiated  by 
the  indorsement  of  such  person  in  blank,  to  bearer  or  to 
another  specified  person.  Subsequent  negotiation  may  be 
made  in  like  manner. 

§  30.  Negotiable  documents  of  title  marked  "  not  nego- 
tiable."—  If  a  document  of  title  which  contains  an  under- 
taking by  a  carrier,  warehouseman  or  other  bailee  to  deliver 
the  goods  to  the  bearer,  to  a  specified  person  or  order,  or  to 
the  order  of  a  specified  person,  or  which  contains  words  of 
like  import,  has  placed  upon  it  the  words  "  not  negotiable," 
"  non-negotiable  "  or  the  like,  such  a  document  may  never- 
theless be  negotiated  by  the  holder  and  is  a  negotiable  docu- 
ment of  title  within  the  meaning  of  this  act.  But  nothing 
in  this  act  contained  shall  be  construed  as  limiting  or  defining 
the  effect  upon  the  obligations  of  the  carrier,  warehouseman, 


APPENDIX.  217 

or  other  bailee  issuing  a  document  of  title  of  placing  thereon 
the  words  "  not  negotiable  "  "  non-negotiable,"  or  the  like. 

§  31.  Transfer  of  non-negotiable  documents. — A  docu- 
ment of  title  which  is  not  in  such  form  that  it  can  be 
negotiated  by  delivery  may  be  transferred  by  the  holder 
by  delivery  to  a  purchaser  or  donee.  A  non-negotiable  docu- 
ment cannot  be  negotiated  and  the  indorsement  of  such  a 
document  gives  the  transferee  no  additional  right. 

§  32.  Who  may  negotiate  a  document. — A  negotiable 
document  of  title  may  be  negotiated  — 

(a)  By  the  owner  thereof,  or 

(b)  By  any  person  to  whom  the  possession  or  custody 
of  the  document  has  been  entrusted  by  the  owner,  if,  by 
the   terms   of   the   document   the   bailee   issuing   the   docu- 
ment undertakes  to  deliver  the  goods  to  the  order  of  the 
person  to  whom  the  possession  or  custody  of  the  document 
has  been  entrusted,  or  if  at  the  time  of  such  entrusting  the 
document  is  in  such  form  that  it  may  be  negotiated  by  de- 
livery. 

§  33.  Rights  of  person  to  whom  document  has  been 
negotiated. — A  person  to  whom  a  negotiable  document  of 
title  has  been  duly  negotiated  acquires  thereby, 

(a)  Such  title  to  the  goods  as  the  person  negotiating  the 
document  to  him  had  or  had  ability  to  convey  to  a  purchaser 
in  good  faith  for  value  and  also  such  title  to  the  goods  as 
the  person  to  whose  order  the  goods  were  to  be  delivered  by 
the  terms  of  the  document  had  or  had  ability  to  convey  to 
a  purchaser  in  good  faith  for  value,  and 

(b)  The  direct  obligation  of  the  bailee  issuing  the  docu- 
ment to  hold  possession  of  the  goods  for  him  according  to 
the  terms  of  the  document  as  fully  as  if  such  bailee  had  con- 
tracted directly  with  him. 

§  34.  Rights  of  person  to  whom  document  has  been 
transferred. — A  person  to  whom  a  document  of  title  has 
been  transferred,  but  not  negotiated,  acquires  thereby,  as 
against  the  transferor,  the  title  to  the  goods,  subject  to  the 
terms  of  any  agreement  with  the  transferor. 


218  SUMMABY    OF    SALES. 

If  the  document  is  non-negotiable,  such  person  also 
acquires  the  right  to  notify  the  bailee  who  issued  the  docu- 
ment of  the  transfer  thereof,  and  thereby  to  acquire  the 
direct  obligation  of  such  bailee  to  hold  possession  of  the 
goods  for  him  according  to  the  terms  of  the  document. 

Prior  to  the  notification  of  such  bailee  by  the  transferor 
or  transferee  of  a  non-negotiable  document  of  title,  the  title 
of  the  transferee  to  the  goods  and  the  right  to  acquire  the 
obligation  of  such  bailee  may  be  defeated  by  the  levy  of  an 
attachment  or  execution  upon  the  goods  by  a  creditor  of  the 
transferor,  or  by  a  notification  to  such  bailee  by  the  trans- 
feror or  a  subsequent  purchaser  from  the  transferor  of  a 
subsequent  sale  of  the  goods  by  the  transferor. 

§  35.  Transfer  of  negotiable  document  without  indorse- 
ment.—  Where  a  negotiable  document  of  title  is  transferred 
for  value  by  delivery,  and  the  indorsement  of  the  transferor 
is  essential  for  negotiation,  the  transferee  acquires  a  right 
against  the  transferor  to  compel  him  to  indorse  the  document 
unless  a  contrary  intention  appears.  The  negotiation  shall 
take  effect  as  of  the  time  when  the  indorsement  is  actually 
made. 

§  36.  Warranties  on  sale  of  document. — A  person  who 
for  value  negotiates  or  transfers  a  document  of  title  by  in- 
dorsement or  delivery,  including  one  who  assigns  for  value 
a  claim  secured  by  a  document  of  title  unless  a  contrary 
intention  appears,  warrants: 

(a)  That  the  document  is  genuine; 

(b)  That  he  has  a  legal  right  to  negotiate  or  transfer  it; 

(c)  That  he  has  knowledge  of  no  fact  which  would  impair 
the  validity  or  worth  of  the  document,  and 

(d)  That  he  has  a  right  to  transfer  the  title  to  the  goods 
and  that  the  goods  are  merchantable  or  fit  for  a  particular 
purpose,  whenever  such  warranties  would  have  been  implied 
if  the  contract  of  the  parties  had  been  to  transfer  without  a 
document  of  title  the  goods  represented  thereby. 


APPENDIX.  219 

§  37.  Indorser  not  a  guarantor.  The  indorsement  of  a 
document  of  title  shall  not  make  the  indorser  liable  for  any 
failure  on  the  part  of  the  bailee  who  issued  the  document 
or  previous  indorsers  thereof  to  fulfil  their  respective 
obligations. 

§  38.  When  negotiation  not  impaired  by  fraud,  mistake 
or  duress. —  The  validity  of  the  negotiation  of  a  negotiable 
document  of  title  is  not  impaired  by  the  fact  that  the 
negotiation  was  a  breach  of  duty  on  the  part  of  the  person 
making  the  negotiation,  or  by  the  fact  that  the  owner  of  the 
document  was  induced  by  fraud,  mistake  or  duress  to  entrust 
the  possession  or  custody  thereof  to  such  person,  if  the  per- 
son to  whom  the  document  was  negotiated  or  a  person  to 
whom  the  document  was  subsequently  negotiated  paid  value 
therefor,  without  notice  of  the  breach  of  duty,  or  fraud,  mis- 
take or  duress. 

§  39.  Attachment  or  levy  upon  goods  for  which  a  nego- 
tiable document  has  been  issued. —  If  goods  are  delivered 
to  a  bailee  by  the  owner  or  by  a  person  whose  act  in  conveying 
the  title  to  them  to  a  purchaser  in  good  faith  for  value  would 
bind  the  owner  and  a  negotiable  document  of  title  is  issued  for 
them  they  cannot  thereafter,  while  in  the  possession  of  such 
bailee,  be  attached  by  garnishment  or  otherwise  or  be  levied 
upon  under  an  execution  unless  the  document  be  first  sur- 
rendered to  the  bailee  or  its  negotiation  enjoined.  The  bailee 
shall  in  no  case  be  compelled  to  deliver  up  the  actual  posses- 
sion of  the  goods  until  the  document  is  surrendered  to  him 
or  impounded  by  the  court. 

§  40.  Creditors'  remedies  to  reach  negotiable  documents. 
— A  creditor  whose  debtor  is  the  owner  of  a  negotiable  docu- 
ment of  title  shall  be  entitled  to  such  aid  from  courts  of  ap- 
propriate jurisdiction  by  injunction  and  otherwise  in  attach- 
ing such  document  or  in  satisfying  the  claim  by  means 
thereof  as  is  allowed  at  law  or  in  equity  in  regard  to  prop- 
erty which  cannot  readily  be  attached  or  levied  upon  by 
ordinary  legal  process. 


220  SUMMARY  OF  SALES. 

PART  III. 
PERFORMANCE  OF  THE  CONTRACT. 

§  41.  Seller  must  deliver  and  buyer  accept  goods. —  It  is 
the  duty  of  the  seller  to  deliver  the  goods,  and  of  the  buyer 
to  accept  and  pay  for  them,  in  accordance  with  the  terms 
of  the  contract  to  sell  or  sale. 

§  42.  Delivery  and  payment  are  concurrent  conditions. — 
Unless  otherwise  agreed,  delivery  of  the  goods  and  payment 
of  the  price  are  concurrent  conditions;  that  is  to  say,  the 
seller  must  be  ready  and  willing  to  give  possession  of  the 
goods  to  the  buyer  in  exchange  for  the  price  and  the  buyer 
must  be  ready  and  willing  to  pay  the  price  in  exchange  for 
possession  of  the  goods. 

§  43.  Place,  time  and  manner  of  delivery. — (1)  Whether 
it  is  for  the  buyer  to  take  possession  of  the  goods  or  for  the 
seller  to  send  them  to  the  buyer  is  a  question  depending  in 
each  case  on  the  contract,  express  or  implied,  between  the 
parties.  Apart  from  any  such  contract,  express  or  implied, 
or  usage  of  trade  to  the  contrary,  the  place  of  delivery  is  the 
seller's  place  of  business  if  he  have  one,  and  if  not  his  resi- 
dence; but  in  case  of  a  contract  to  sell  or  a  sale  of  specific 
goods,  which  to  the  knowledge  of  the  parties  when  the  con- 
tract or  the  sale  was  made  were  in  some  other  place,  then  that 
place  is  the  place  of  delivery. 

(2)  Where  by  a  contract  to  sell  or  a  sale  the  seller  is  bound 
to  send  the  goods  to  the  buyer,  but  no  time  for  sending  them 
is  fixed,  the  seller  is  bound  to  send  them  within  a  reasonable 
time. 

(3)  Where  the  goods  at  the  time  of  sale  are  in  the  posses- 
sion of  a  third  person,  the  seller  has  not  fulfilled  his  obliga- 
tion to  deliver  to  the  buyer  unless  and  until  such  third  person 
acknowledges  to  the  buyer  that  he  holds  the  goods  on  the 
buyer's  behalf;  but  as  against  all  others  than  the  seller  the 
buyer  shall  be  regarded  as  having  received  delivery  from  the 
time  when  such  third  person  first  has  notice  of  the  sale. 


APPENDIX.  221 

Nothing  in  this  section,  however,  shall  affect  the  operation 
of  the  issue  or  transfer  of  any  document  of  title  to  goods. 

(4)  Demand  or  tender  of  delivery  may  be  treated  as  in- 
effectual unless  made  at  a  reasonable  hour.    What  is  a  reason- 
able hour  is  a  question  of  fact. 

(5)  Unless  otherwise  agreed,  the  expenses  of  and  inci- 
dental to  putting  the  goods  into  a  deliverable  state  must  be 
borne  by  the  seller. 

§  44.  Delivery  of  wrong  quantity. — (1)  Where  the  seller 
delivers  to  the  buyer  a  quantity  of  goods  less  than  he  con- 
tracted to  sell,  the  buyer  may  reject  them,  but  if  the  buyer 
accepts  or  retains  the  goods  so  delivered,  knowing  that  the 
seller  is  not  going  to  perform  the  contract  in  full,  he  must 
pay  for  them  at  the  contract  rate.  If,  however,  the  buyer 
has  used  or  disposed  of  the  goods  delivered  before  he  knows 
that  the  seller  is  not  going  to  perform  his  contract  in  full, 
the  buyer  shall  not  be  liable  for  more  than  the  fair  value  to 
him  of  the  goods  so  received. 

(2)  Where  the  seller  delivers  to  the  buyer  a  quantity  of 
goods  larger  than  he  contracted  to  sell,  the  buyer  may  accept 
the  goods  included  in  the  contract  and  reject  the  rest,  or  he 
may  reject  the  whole.    If  the  buyer  accepts  the  whole  of  the 
goods  so  delivered  he  must  pay  for  them  at  the  contract  rate. 

(3)  Where  the  seller  delivers  to  the  buyer  the  goods  he 
contracted  to  sell  mixed  with  goods  of  a  different  description 
not  included  in  the  contract,  the  buyer  may  accept  the  goods 
which  are  in  accordance  with  the  contract  and  reject  the  rest, 
or  he  may  reject  the  whole. 

(4)  The  provisions  of  this  section  are  subject  to  any  usage 
of  trade,  special  agreement,  or  course  of  dealing  between  the 
parties. 

§  45.  Delivery  in  instalments. — (1)  Unless  otherwise 
agreed,  the  buyer  of  goods  is  not  bound  to  accept  delivery 
thereof  by  instalments. 

(2)  Where  there  is  a  contract  to  sell  goods  to  be  delivered 
by  stated  instalments,  which  are  to  be  separately  paid  for, 
and  the  seller  makes  defective  deliveries  in  respect  of  one  or 


222  SUMMABY    OF    SALES. 

more  instalments,  or  the  buyer  neglects  or  refuses  to  take 
delivery  of  or  pay  for  one  or  more  instalments,  it  depends 
in  each  case  on  the  terms  of  the  contract  and  the  circum- 
stances of  the  case,  whether  the  breach  of  contract  is  so  ma- 
terial as  to  justify  the  injured  party  in  refusing  to  proceed 
further  and  suing  for  damages  for  breach  of  the  entire  con- 
tract, or  whether  the  breach  is  severable,  giving  rise  to  a 
claim  for  compensation,  but  not  to  a  right  to  treat  the  whole 
contract  as  broken. 

§  46.  Delivery  to  a  carrier  on  behalf  of  the  buyer. — (1) 
Where,  in  pursuance  of  a  contract  to  sell  or  a  sale,  the  seller 
is  authorized  or  required  to  send  the  goods  to  the  buyer,  de- 
livery of  the  goods  to  a  carrier,  whether  named  by  the  buyer 
or  not,  for  the  purpose  of  transmission  to  the  buyer  is  deemed 
to  be  a  delivery  of  the  goods  to  the  buyer,  except  in  the  cases 
provided  for  in  section  19,  rule  5,  or  unless  a  contrary  intent 
appears. 

(2)  Unless  otherwise  authorized  by  the  buyer,  the  seller 
must  make  such  contract  with  the  carrier  on  behalf  of  the 
buyer  as  may  be  reasonable,  having  regard  to  the  nature  of 
the  goods  and  the  other  circumstances  of  the  case.     If  the 
seller  omit  so  to  do,  and  the  goods  are  lost  or  damaged  in 
course  of  transit,  the  buyer  may  decline  to  treat  the  delivery 
to  the  carrier  as  a  delivery  to  himself,  or  may  hold  the  seller 
responsible  in  damages. 

(3)  Unless  otherwise  agreed,  where  goods  are  sent  by 
the  seller  to  the  buyer  under  circumstances  in  which  the 
seller  knows  or  ought  to  know  that  it  is  usual  to  insure,  the 
seller  must  give  such  notice  to  the  buyer  as  may  enable  him 
to  insure  them  during  their  transit,  and,  if  the  seller  fails  to 
do  so,  the  goods  shall  be  deemed  to  be  at  his  risk  during  such 
transit. 

§  47.  Right  to  examine  the  goods. — (1)  Where  goods  are 
delivered  to  the  buyer,  which  he  has  not  previously  examined, 
he  is  not  deemed  to  have  accepted  them  unless  and  until  he 
has  had  a  reasonable  opportunity  of  examining  them  for  the 


APPENDIX.  223 

purpose  of  ascertaining  whether  they  are  in  conformity  with 
the  contract. 

(2)  Unless  otherwise  agreed,  when  the  seller  tenders  de- 
livery of  goods  to  the  buyer,  he  is  bound,  on  request,  to  afford 
the  buyer  a  reasonable  opportunity  of  examining  the  goods 
for  the  purpose  of  ascertaining  whether  they  are  in  con- 
formity with  the  contract. 

(3)  Where  the  goods  are  delivered  to  a  carrier  by  the 
seller,  in  accordance  with  an  order  from  or  agreement  with 
the  buyer,  upon  the  terms  that  the  goods  shall  not  be  delivered 
by  the  carrier  to  the  buyer  until  he  has  paid  the  price,  whether 
such  terms  are  indicated  by  marking  the  goods  with  the 
words  "  collect  oh  delivery,"  or  otherwise,  the  buyer  is  not 
entitled  to  examine  the  goods  before  payment  of  the  price  in 
the  absence  of  agreement  permitting  such  examination. 

§  48.  What  constitutes  acceptance. — The  buyer  is  deemed 
to  have  accepted  the  goods  when  he  intimates  to  the  seller  that 
he  has  accepted  them,  or  when  the  goods  have  been  delivered 
to  him,  and  he  does  any  act  in  relation  to  them  which  is 
inconsistent  with  the  ownership  of  the  seller,  or  when,  after 
the  lapse  of  a  reasonable  time,  he  retains  the  goods  without 
intimating  to  the  seller  that  he  has  rejected  them. 

§  49.  Acceptance  does  not  bar  action  for  damages. —  In 
the  absence  of  express  or  implied  agreement  of  the  parties, 
acceptance  of  the  goods  by  the  buyer  shall  not  discharge  the 
seller  from  liability  in  damages  or  other  legal  remedy  for 
breach  of  any  promise  or  warranty  in  the  contract  to  sell  or 
the  sale.  But  if,  after  acceptance  of  the  goods,  the  buyer  fail 
to  give  notice  to  the  seller  of  the  breach  of  any  promise  or 
warranty  within  a  reasonable  time  after  the  buyer  knows, 
or  ought  to  know  of  such  breach,  the  seller  shall  not  be  liable 
therefor. 

§  50.  Buyer  is  not  bound  to  return  goods  wrongly  de- 
livered.—  Unless  otherwise  agreed,  where  goods  are  de- 
livered to  the  buyer,  and  he  refuses  to  accept  them,  having 
the  right  so  to  do,  he  is  not  bound  to  return  them  to  the 


224  SUMMABY    OF    SALES. 

seller,  but  it  is  sufficient  if  he  notifies  the  seller  that  he  refuses 
to  accept  them. 

§  51.  Buyer's  liability  for  failing  to  accept  delivery. — 
When  the  seller  is  ready  and  willing  to  deliver  the  goods, 
and  requests  the  buyer  to  take  delivery,  and  the  buyer  does 
not  within  a  reasonable  time  after  such  request  take  delivery 
of  the  goods,  he  is  liable  to  the  seller  for  any  loss  occasioned 
by  his  neglect  or  refusal  to  take  delivery,  and  also  for  a 
reasonable  charge  for  the  care  and  custody  of  the  goods.  If 
the  neglect  or  refusal  of  the  buyer  to  take  delivery  amounts 
to  a  repudiation  or  breach  of  the  entire  contract,  the  seller 
shall  have  the  rights  against  the  goods  and  on  the  contract 
hereinafter  provided  in  favor  of  the  seller  when  the  buyer  is 
in  default. 

PART  IV. 
RIGHTS    OF   UNPAID    SELLER   AGAINST    THE    GOODS. 

§  52.  Definition  of  unpaid  seller. — (1)  The  seller  of  goods 
is  deemed  to  be  an  unpaid  seller  within  the  meaning  of  this 
act  — 

(a)  When  the  whole  of  the  price  has  not  been  paid  or 
tendered. 

(b)  When  a  bill  of  exchange  or  other  negotiable  instru- 
ment has  been  received  as  conditional  payment,  and  the  con- 
dition on  which  it  was  received  has  been  broken  by  reason 
of  the  dishonor  of  the  instrument,  the  insolvency  of  the  buyer, 
or  otherwise. 

(2)  In  this  part  of  this  act  the  term  "  seller  "  includes  an 
agent  of  the  seller  to  whom  the  bill  of  lading  has  been  in- 
dorsed, or  a  consignor  or  agent  who  has  himself  paid,  or  is 
directly  responsible  for,  the  price,  or  any  other  person  who  is 
in  the  position  of  a  seller. 

§  53.  Remedies  of  an  unpaid  seller — (1)  Subject  to  the 
provisions  of  this  act,  notwithstanding  that  the  property  in 
the  goods  may  have  passed  to  the  buyer,  the  unpaid  seller  of 
goods,  as  such,  has  — 

(a)  A  lien  on  the  goods  or  right  to  retain  them  for  the 
price  while  he  is  in  possession  of  them ; 


APPENDIX.  225 

(b)  In  case  of  the  insolvency  of  the  buyer,  a  right  of  stop- 
ping the  goods  in  transitu  after  he  has  parted  with  the  posses- 
sion of  them ; 

(c)  A  right  of  resale  as  limited  by  this  act. 

(d)  A  right  to  rescind  the  sale  as  limited  by  this  act. 

(2)  Where  the  property  in  goods  has  not  passed  to  the 
buyer,  the  unpaid  seller  has,  in  addition  to  his  other  remedies, 
a  right  of  withholding  delivery  similar  to  and  coextensive 
with  his  rights  of  lien  and  stoppage  in  transitu  where  the 
property  has  passed  to  the  buyer. 

UNPAID  SELLER'S  LIEN. 

§  54.  When  right  of  lien  may  be  exercised. — (1)  Subject 
to  the  provisions  of  this  act,  the  unpaid  seller  of  goods  who  is 
in  possession  of  them  is  entitled  to  retain  possession  of  them 
until  payment  or  tender  of  the  price  in  the  following  cases, 
namely : 

(a)  Where  the  goods  have  been  sold  without  any  stip- 
ulation as  to  credit ; 

(b)  Where  the  goods  have  been  sold  on  credit,  but  the 
term  of  credit  has  expired; 

(c)  Where  the  buyer  becomes  insolvent. 

(2)  The  seller  may  exercise  his  right  of  lien  notwith- 
standing that  he  is  in  possession  of  the  goods  as  agent  or 
bailee  for  the  buyer. 

§  55.  Lien  after  part  delivery. — Where  an  unpaid  seller 
has  made  part  delivery  of  the  goods,  he  may  exercise  his  right 
of  lien  on  the  remainder,  unless  such  part  delivery  has  been 
made  under  such  circumstances  as  to  show  an  intent  to  waive 
the  lien  or  right  of  retention. 

§  56.  When  lien  is  lost. — (1)  The  unpaid  seller  of  goods 
loses  his  lien  thereon, — 

(a)  When  he  delivers  the  goods  to  a  carrier  or  other  bailee 
for  the  purpose  of  transmission  to  the  buyer  without  reserv- 
ing the  property  in  the  goods  or  the  right  to  the  possession 
thereof ; 

15 


226  SUMMARY  OF  SALES. 

(b)  When  the  buyer  or  his  agent  lawfully  obtains  posses- 
sion of  the  goods ; 

(c)  By  waiver  thereof. 

(2)  The  unpaid  seller  of  goods,  having  a  lien  thereon, 
does  not  lose  his  lien  by  reason  only  that  he  has  obtained 
judgment  or  decree  for  the  price  of  the  goods. 

STOPPAGE  IN  TRANSITU. 

§  57.  Seller  may  stop  goods  on  buyer's  insolvency. — 
Subject  to  the  provisions  of  this  act,  when  the  buyer  of  goods 
is  or  becomes  insolvent,  the  unpaid  seller  who  has  parted 
with  the  possession  of  the  goods  has  the  right  of  stopping 
them  in  transitu,  that  is  to  say,  he  may  resume  possession  of 
the  goods  at  any  time  while  they  are  in  transit,  and  he  will 
then  become  entitled  to  the  same  rights  in  regard  to  the 
goods  as  he  would  have  had  if  he  had  never  parted  with  the 
possession. 

§  58.  When  goods  are  in  transit. — (1)  Goods  are  in  tran- 
sit within  the  meaning  of  section  57, — 

(a)  From  the  time  when  they  are  delivered  to  a  carrier 
by  land  or  water,  or  other  bailee  for  the  purpose  of  transmis- 
sion to  the  buyer,  until  the  buyer,  or  his  agent  in  that  behalf, 
takes  delivery  of  them  from  such  carrier  or  other  bailee; 

(b)  If  the  goods  are  rejected  by  the  buyer,  and  the  carrier 
or  other  bailee  continues  in  possession  of  them,  even  if  the 
seller  has  refused  to  receive  them  back. 

(2)  Goods  are  no  longer  in  transit  within  the  meaning  of 
section  57, 

(a)  If  the  buyer,  or  his  agent  in  that  behalf,  obtains  de- 
livery of  the  goods  before  their  arrival  at  the  appointed 
destination ; 

(b)  If,  after  the  arrival  of  the  goods  at  the  appointed 
destination,  the  carrier  or  other  bailee  acknowledges  to  the 
buyer  or  his  agent  that  he  holds  the  goods  on  his  behalf  and 
continues  in  possession  of  them  as  bailee  for  the  buyer  or  his 
agent;  and  it  is  immaterial  that  a  further  destination  for 
the  goods  may  have  been  indicated  by  the  buyer. 


APPENDIX.  227 

(c)  If  the  carrier  or  other  bailee  wrongfully  refuses  to 
deliver  the  goods  to  the  buyer  or  his  agent  in  that  behalf. 

(3)  If  goods  are  delivered  to  a  ship  chartered  by  the  buyer, 
it  is  a  question  depending  on  the  circumstances  of  the  particu- 
lar case,  whether  they  are  in  the  possession  of  the  master  as  a 
carrier  or  as  agent  of  the  buyer. 

(4)  If  part  delivery  of  the  goods  has  been  made  to  the 
buyer,  or  his  agent  in  that  behalf,  the  remainder  of  the  goods 
may  be  stopped  in  transitu,  unless  such  part  delivery  has 
been  made  under  such  circumstances  as  to  show  an  agree- 
ment with  the  buyer  to  give  up  possession  of  the  whole  of 
the  goods. 

§  59.  Ways  of  exercising  the  right  to  stop. — (1)  The 
unpaid  seller  may  exercise  his  right  of  stoppage  in  transitu 
either  by  obtaining  actual  possession  of  the  goods  or  by 
giving  notice  of  his  claim  to  the  carrier  or  other  bailee  in 
whose  possession  the  goods  are.  Such  notice  may  be  given 
either  to  the  person  in  actual  possession  of  the  goods  or  to  his 
principal.  In  the  latter  case  the  notice,  to  be  effectual,  must 
be  given  at  such  time  and  under  such  circumstances  that  the 
principal,  by  the  exercise  of  reasonable  diligence,  may  pre- 
vent a  delivery  to  the  buyer. 

(2)  When  notice  of  stoppage  in  transitu  is  given  by  the 
seller  to  the  carrier,  or  other  bailee  in  possession  of  the  goods, 
he  must  redeliver  the  goods  to,  or  according  to  the  directions 
of,  the  seller.  The  expenses  of  such  delivery  must  be  borne 
by  the  seller.  If,  however,  a  negotiable  document  of  title 
representing  the  goods  has  been  issued  by  the  carrier  or  other 
bailee,  he  shall  not  be  obliged  to  deliver  or  justified  in  de- 
livering the  goods  to  the  seller  unless  such  document  is  first 
surrendered  for  cancellation. 

RESALE  BY  THE  SELLER. 

§  60.  When  and  how  resale  may  be  made. — (1)  Where 
the  goods  are  of  a  perishable  nature,  or  where  the  seller 
expressly  reserves  the  right  of  resale  in  case  the  buyer  should 
make  default,  or  where  the  buyer  has  been  in  default  in  the 


228  SUMMAEY    OF    SALES. 

payment  of  the  price  an  unreasonable  time,  an  unpaid  seller 
having  a  right  of  lien  or  having  stopped  the  goods  in  transitu 
may  resell  the  goods.  He  shall  not  thereafter  be  liable  to 
the  original  buyer  upon  the  contract  to  sell  or  the  sale  or  for 
any  profit  made  by  such  resale,  but  may  recover  from  the 
buyer  damages  for  any  loss  occasioned  by  the  breach  of  the 
contract  or  the  sale. 

(2)  Where  a  resale  is  made,  as  authorized  in  this  section, 
the  buyer  acquires  a  good  title  as  against  the  original  buyer. 

(3)  It  is  not  essential  to  the  validity  of  a  resale  that 
notice  of  an  intention  to  resell  the  goods  be  given  by  the 
seller  to  the  original  buyer.     But  where  the  right  to  resell 
is  not  based  on  the  perishable  nature  of  the  goods  or  upon 
an  express  provision  of  the  contract  or  the  sale,  the  giving 
or  failure  to  give  such  notice  shall  be  relevant  in  any  issue 
involving  the  question  whether  the  buyer  had  been  in  default 
an  unreasonable  time  before  the  resale  was  made. 

(4)  It  is  not  essential  to  the  validity  of  a  resale  that  notice 
of  the  time  and  place  of  such  resale  should  be  given  by  the 
seller  to  the  original  buyer. 

(5)  The  seller  is  bound  to  exercise  reasonable  care  and 
judgment  in  making  a  resale,  and  subject  to  this  requirement 
may  make  a  resale  either  by  public  or  private  sale. 

RESCISSION  BY  THE  SELLER. 

§  61.  When  and  how  the  seller  may  rescind  the  sale. — 
(1)  An  unpaid  seller  having  a  right  of  lien  or  having  stopped 
the  goods  in  transitu,  may  rescind  the  transfer  of  title  and 
resume  the  property  in  the  goods,  where  he  expressly  reserved 
the  right  to  do  so  in  case  the  buyer  should  make  default,  or 
where  the  buyer  has  been  in  default  in  the  payment  of  the 
price  an  unreasonable  time.  The  seller  shall  not  thereafter 
be  liable  to  the  buyer  upon  the  contract  to  sell  or  the  sale, 
but  may  recover  from  the  buyer  damages  for  any  loss  occa- 
sioned by  the  breach  of  the  contract  or  the  sale. 

(2)  The  transfer  of  title  shall  not  be  held  to  have  been 
rescinded  by  an  unpaid  seller  until  he  has  manifested  by 


APPENDIX.  229 

notice  to  the  buyer  or  by  some  other  overt  act  an  intention  to 
rescind.  It  is  not  necessary  that  such  overt  act  should  be 
communicated  to  the  buyer,  but  the  giving  or  failure  to  give 
notice  to  the  buyer  of  the  intention  to  rescind  shall  be  rele- 
vant in  any  issue  involving  the  question  whether  the  buyer 
had  been  in  default  an  unreasonable  time  before  the  right  of 
rescission  was  asserted. 

§  62.  Effect  of  sale  of  goods  subject  to  lien  or  stoppage 
in  transitu. —  Subject  to  the  provisions  of  this  act,  the  unpaid 
seller's  right  of  lien  or  stoppage  in  transitu  is  not  affected  by 
any  sale,  or  other  disposition  of  the  goods  which  the  buyer 
may  have  made,  unless  the  seller  has  assented  thereto. 

If,  however,  a  negotiable  document  of  title  has  been  issued 
for  goods,  no  seller's  lien  or  right  of  stoppage  in  transitu  shall 
defeat  the  right  of  any  purchaser  for  value  in  good  faith  to 
whom  such  document  has  been  negotiated,  whether  such 
negotiation  be  prior  or  subsequent  to  the  notification  to  the 
carrier,  or  other  bailee  who  issued  such  document,  of  the 
seller's  claim  to  a  lien  or  right  of  stoppage  in  transitu. 

PART  V. 

ACTIONS  FOR  BREACH  OF  THE  CONTRACT. 
REMEDIES  OF  THE  SELLER. 

§  63.  Action  for  the  price. — (1)  Where,  under  a  contract 
to  sell  or  a  sale,  the  property  in  the  goods  has  passed  to  the 
buyer,  and  the  buyer  wrongfully  neglects  or  refuses  to  pay 
for  the  goods  according  to  the  terms  of  the  contract  or  the 
sale,  the  seller  may  maintain  an  action  against  him  for  the 
price  of  the  goods. 

(2)  Where,  under  a  contract  to  sell  or  a  sale,  the  price 
is  payable  on  a  day  certain,  irrespective  of  delivery  or  of 
transfer  of  title,  and  the  buyer  wrongfully  neglects  or  re- 
fuses to  pay  such  price,  the  seller  may  maintain  an  action 
for  the  price,  although  the  property  in  the  goods  has  not 
passed,  and  the  goods  have  not  been  appropriated  to  the 
contract.  But  it  shall  be  a  defense  to  such  an  action  that 


230  SUMMARY  OF  SALES. 

the  seller  at  any  time  before  judgment  in  such  action  has 
manifested  an  inability  to  perform  the  contract  or  the  sale 
on  his  part  or  an  intention  not  to  perform  it. 

(3)  Although  the  property  in  the  goods  has  not  passed, 
if  they  cannot  readily  be  resold  for  a  reasonable  price,  and  if 
the  provisions  of  section  64  (4)  are  not  applicable,  the  seller 
may  offer  to  deliver  the  goods  to  the  buyer,  and,  if  the  buyer 
refuses  to  receive  them,  may  notify  the  buyer  that  the  goods 
are  thereafter  held  by  the  seller  as  bailee  for  the  buyer. 
Thereafter  the  seller  may  treat  the  goods  as  the  buyer's  and 
may  maintain  an  action  for  the  price. 

§  64.  Action  for  damages  for  non-acceptance  of  the  goods. 
— (1)  Where  the  buyer  wrongfully  neglects  or  refuses  to 
accept  and  pay  for  the  goods,  the  seller  may  maintain  an 
action  against  him  for  damages  for  non-acceptance. 

(2)  The  measure  of  damages  is  the  estimated  loss  directly 
and  naturally  resulting,  in  the  ordinary  course  of  events, 
from  the  buyer's  breach  of  contract. 

(3)  Where  there  is  an  available  market  for  the  goods  in 
question,  the  measure  of  damages  is,  in  the  absence  of  special 
circumstances,    showing    proximate    damage    of    a    greater 
amount,  the  difference  between  the  contract  price  and  the 
market  or  current  price  at  the  time  or  times  when  the  goods 
ought  to  have  been  accepted,  or,  if  no  time  was  fixed  for 
acceptance,  then  at  the  time  of  the  refusal  to  accept. 

(4)  If,  while  labor  or  expense  of  material  amount  are 
necessary  on  the  part  of  the  seller  to  enable  him  to  fulfill 
his  obligations  under  the  contract  to  sell  or  the  sale,  the  buyer 
repudiates  the  contract  or  the  sale,  or  notifies  the  seller  to 
proceed  no  further  therewith,  the  buyer  shall  be  liable  to 
the  seller  for  no  greater  damages  than  the  seller  would  have 
suffered  if  he  did  nothing  towards  carrying  out  the  contract 
or  the  sale  after  receiving  notice  of  the  buyer's  repudiation 
or  countermand.     The  profit  the  seller  would  have  made  if 
the  contract  or  the  sale  had  been  fully  performed  shall  be 
considered  in  estimating  such  damages. 


APPENDIX.  231 

§  65.  When  seller  may  rescind  contract  or  sale. — Where 
the  goods  have  not  been  delivered  to  the  buyer,  and  the  buyer 
has  repudiated  the  contract  to  sell  or  sale,  or  has  manifested 
his  inability  to  perform  his  obligations  thereunder,  or  has 
committed  a  material  breach  thereof,  the  seller  may  totally 
rescind  the  contract  or  the  sale  by  giving  notice  of  his  election 
so  to  do  to  the  buyer. 

REMEDIES  OF  THE  BUYER. 

§  66.  Action  for  converting  or  detaining  goods. — Where 
the  property  in  the  goods  has  passed  to  the  buyer  and  the 
seller  wrongfully  neglects  or  refuses  to  deliver  the  goods, 
the  buyer  may  maintain  any  action  allowed  by  law  to  the 
owner  of  goods  of  similar  kind  when  wrongfully  converted 
or  withheld. 

§  67.  Action  for  failing  to  deliver  goods. — (1)  Where  the 
property  in  the  goods  has  not  passed  to  the  buyer,  and  the 
seller  wrongfully  neglects  or  refuses  to  deliver  the  goods, 
the  buyer  may  maintain  an  action  against  the  seller  for  dam- 
ages for  non-delivery. 

(2)  The  measure  of  damages  is  the  loss  directly  and  natu- 
rally resulting  in  the  ordinary  course  of  events,  from  the 
seller's  breach  of  contract. 

(3)  Where  there  is  an  available  market  for  the  goods  in 
question,  the  measure  of  damages,  in  the  absence  of  special 
circumstances    showing    proximate    damages    of    a    greater 
amount,  is  the  difference  between  the  contract  price  and  the 
market  or  current  price  of  the  goods  at  the  time  or  times 
when  they  ought  to  have  been  delivered,  or,  if  no  time  was 
fixed,  then  at  the  time  of  the  refusal  to  deliver. 

§  68.  Specific  performance. — Where  the  seller  has  broken 
a  contract  to  deliver  specific  or  ascertained  goods,  a  court 
having  the  powers  of  a  court  of  equity  may,  if  it  thinks  fit, 
on  the  application  of  the  buyer,  by  its  judgment  or  decree 
direct  that  the  contract  shall  be  performed  specifically,  with- 
out giving  the  seller  the  option  of  retaining  the  goods  on  pay- 


232  SUMMAEY    OF    SALES. 

ment  of  damages.  The  judgment  or  decree  may  be  uncon- 
ditional, or  upon  such  terms  and  conditions  as  to  damages, 
payment  of  the  price  and  otherwise,  as  to  the  court  may 
seem  just. 

§  69.  Remedies  for  breach  of  warranty. — (1)  Where  there 
is  a  breach  of  warranty  by  the  seller,  the  buyer  may,  at  his 
election, — 

(a)  Accept  or  keep  the  goods  and  set  up   against  the 
seller,   the  breach  of  warranty  by  way  of  recoupment  in 
diminution  or  extinction  of  the  price ; 

(b)  Accept  or  keep  the  goods  and  maintain  an  action 
against  the  seller  for  damages  for  the  breach  of  warranty; 

(c)  Refuse  to  accept  the  goods,  if  the  property  therein 
has  not  passed,  and  maintain  an  action  against  the  seller  for 
damages  for  the  breach  of  warranty ; 

(d)  Rescind  the  contract  to  sell  or  the  sale  and  refuse  to 
receive  the  goods,  or  if  the  goods  have  already  been  received, 
return  them  or  offer  to  return  them  to  the  seller  and  recover 
the  price  or  any  part  thereof  which  has  been  paid. 

(2)  When  the  buyer  has  claimed  and  been  granted   a 
remedy  in  any  one  of  these  ways,  no  other  remedy  can  there- 
after be  granted. 

(3)  Where  the  goods  have  been  delivered  to  the  buyer, 
he  cannot  rescind  the  sale  if  he  knew  of  the  breach  of  war- 
ranty when  he  accepted  the  goods,  or  if  he  fails  to  notify 
the  seller  within  a  reasonable  time  of  the  election  to  rescind, 
or  if  he  fails  to  return  or  to  offer  to  return  the  goods  to  the 
seller  in  substantially  as  good  condition  as  they  were  in  at 
the  time  the  property  was  transferred  to  the  buyer.     But 
if  deterioration  or  injury  of  the  goods  is  due  to  the  breach 
of  warranty,  such  deterioration  or  injury  shall  not  prevent 
the  buyer  from  returning  or  offering  to  return  the  goods  to 
the  seller  and  rescinding  the  sale. 

(4)  Where  the  buyer  is  entitled  to  rescind  the  sale  and 
elects  to  do  so,  the  buyer  shall  cease  to  be  liable  for  the  price 
upon  returning  or  offering  to  return  the  goods.     If  the  price 
or  any  part  thereof  has  already  been  paid,  the  seller  shall  be 


APPENDIX.  233 

liable  to  repay  so  much  thereof  as  has  been  paid,  concur- 
rently with  the  return  of  the  goods,  or  immediately  after  an 
offer  to  return  the  goods  in  exchange  for  repayment  of  the 
price. 

(5)  Where  the  buyer  is  entitled  to  rescind  the  sale  and 
elects  to  do  so,  if  the  seller  refuses  to  accept  an  offer  of  the 
buyer  to  return  the  goods,  the  buyer  shall   thereafter  be 
deemed  to  hold  the  goods  as  bailee  for  the  seller,  but  subject 
to  a  lien  to  secure  the  repayment  of  any  portion  of  the  price 
which  has  been  paid,  and  with  the  remedies  for  the  enforce- 
ment of  such  lien  allowed  to  an  unpaid  seller  by  section  53. 

(6)  The  measure  of  damages  for  breach  of  warranty  is 
the  loss  directly  and  naturally  resulting,  in  the  ordinary 
course  of  events,  from  the  breach  of  warranty. 

(7)  In  the  case  of  breach  of  warranty  of  quality,  such  loss, 
in  the  absence  of  special  circumstances  showing  proximate 
damage  of  a  greater  amount,  is  the  difference  between  the 
value  of  the  goods  at  the  time  of  delivery  to  the  buyer  and 
the  value  they  would  have  had  if  they  had  answered  to  the 
warranty. 

§  70.  Interest  and  special  damages. —  Nothing  in  this  act 
shall  affect  the  right  of  the  buyer  or  the  seller  to  recover 
interest  or  special  damages  in  any  case  where  by  law  interest 
or  special  damages  may  be  recoverable,  or  to  recover  money 
paid  where  the  consideration  for  the  payment  of  it  has  failed. 

PART  VI. 
INTERPRETATION. 

§  71.  Variation  of  implied  obligations. — Where  any  right, 
duty  or  liability  would  arise  under  a  contract  to  sell  or  a  sale 
by  implication  of  law,  it  may  be  negatived  or  varied  by  ex- 
press agreement  or  by  the  course  of  dealing  between  the 
parties,  or  by  custom,  if  the  custom  be  such  as  to  bind  both 
parties  to  the  contract  or  the  sale. 

§  72.  Rights  may  be  enforced  by  action. — Where  any 
right,  duty  or  liability  is  declared  by  this  act,  it  may,  unless 
otherwise  by  this  act  provided,  be  enforced  by  action. 


234  SUMMAEY    OF    SALES. 

§  73.  Rule  for  cases  not  provided  for  by  this  act — In 

any  case  not  provided  for  in  this  act,  the  rules  of  law  and 
equity,  including  the  law  merchant,  and  in  particular  the 
rules  relating  to  the  law  of  principal  and  agent  and  to  the 
effect  of  fraud,  misrepresentation,  duress  or  coercion,  mis- 
take, bankruptcy,  or  other  invalidating  cause,  shall  continue 
to  apply  to  contracts  to  sell  and  to  sales  of  goods. 

§  74.  Interpretation  shall  give  effect  to  purpose  of  uni- 
formity.— This  act  shall  be  so  interpreted  and  construed,  as 
to  effectuate  its  general  purpose  to  make  uniform  the  laws 
of  those  states  which  enact  it. 

§  75.  Provisions  not  applicable  to  mortgages. — The  pro- 
visions of  this  act  relating  to  contracts  to  sell  and  to  sales  do 
not  apply,  unless  so  stated,  to  any  transaction  in  the  form 
of  a  contract  to  sell  or  a  sale  which  is  intended  to  operate 
by  way  of  mortgage,  pledge,  charge,  or  other  security. 

§  76.  Definitions. — (1)  In  this  act,  unless  the  context  or 
subject  matter  otherwise  requires  — 

"Action  "  includes  counterclaim,  set-off  and  suit  in  equity. 

"  Buyer  "  means  a  person  who  buys  or  agrees  to  buy  goods' 
or  any  legal  successor  in  interest  of  such  person. 

"  Defendant "  includes  a  plaintiff  against  whom  a  right 
of  set-off  or  counterclaim  is  asserted. 

"  Delivery  "  means  voluntary  transfer  of  possession  from 
one  person  to  another. 

"  Divisible  contract  to  sell  or  sale  "  means  a  contract  to 
sell  or  a  sale  in  which  by  its  terms  the  price  for  a  portion  or 
portions  of  the  goods  less  than  the  whole  is  fixed  or  ascer- 
tainable  by  computation. 

"  Document  of  title  to  goods  "  includes  any  bill  of  lading, 
dock  warrant,  warehouse  receipt  or  order  for  the  delivery 
of  goods,  or  any  other  documents  used  in  the  ordinary  course 
of  business  in  the  sale  or  transfer  of  goods,  as  proof  of  the 
possession  or  control  of  the  goods,  or  authorizing  or  purport- 
ing to  authorize  the  possessor  of  the  document  to  transfer  or 
receive,  either  by  indorsement  or  by  delivery,  goods  repre- 
sented by  such  document. 


APPENDIX.  235 

"  Fault "  means  wrongful  act  or  default. 

"  Fungible  goods  "  means  goods  of  which  any  unit  is  from 
its  nature  or  by  mercantile  usage  treated  as  the  equivalent 
of  any  other  unit. 

"  Future  goods  "  means  goods  to  be  manufactured  or  ac- 
quired by  the  seller  after  the  making  of  the  contract  of  sale. 

"  Goods  "  include  all  chattels  personal  other  than  things 
in  action  and  money.  The  term  includes  emblements,  in- 
dustrial growing  crops,  and  things  attached  to  or  forming 
part  of  the  land  which  are  agreed  to  be  severed  before  sale  or 
under  the  contract  of  sale. 

"  Order  "  in  sections  of  this  act  relating  to  documents  of 
title  means  an  order  by  indorsement  on  the  document. 

"  Person  "  includes  a  corporation  or  partnership  or  two  or 
more  persons  having  a  joint  or  common  interest. 

"  Plaintiff  "  includes  defendant  asserting  a  right  of  set- 
off  or  counterclaim. 

"  Property  "  means  the  general  property  in  goods,  and  not 
merely  a  special  property. 

"  Purchaser  "  includes  mortgagee  and  pledgee. 

"  Purchases "  includes  taking  as  a  mortgagee  or  as  a 
pledgee. 

"  Quality  of  Goods  "  includes  their  state  or  condition. 

"  Sale  "  includes  a  bargain  and  sale  as  well  as  a  sale  and 
delivery. 

"  Seller  "  means  a  person  who  sells  or  agrees  to  sell  goods, 
or  any  legal  successor  in  the  interest  of  such  person. 

"  Specific  goods  "  means  goods  identified  and  agreed  upon 
at  the  time  a  contract  to  sell  or  a  sale  is  made. 

"  Value  "  is  any  consideration  sufficient  to  support  a  simple 
contract.  An  antecedent  or  pre-existing  claim,  whether  for 
money  or  not,  constitutes  value  where  goods  or  documents 
of  titles  are  taken  either  in  satisfaction  thereof  or  as  security 
therefor. 

(2)  A  thing  is  done  "  in  good  faith  "  within  the  meaning 
of  this  act  when  it  is  in  fact  done  honestly,  whether  it  be  done 
negligently  or  not. 


236  SUMMAKY    OF    SALES. 

(3)  A  person  is  insolvent  within  the  meaning  of  this  act 
who  either  has  ceased  to  pay  his  debts  in  the  ordinary  course 
of  business  or  cannot  pay  his  debts  as  they  become  due, 
whether  he  has  committed  an  act  of  bankruptcy  or  not,  and 
whether  he  is  insolvent  within  the  meaning  of  the  federal 
bankruptcy  law  or  not. 

(4)  Goods  are  in  a  "  deliverable  state  "  within  the  mean- 
ing of  this  act  when  they  are  in  such  a  state  that  the  buyer 
would,  under  the  contract,  be  bound  to  take  delivery  of  them. 


INDEX. 


Appropriation:  PAGE. 

delivery,    equivalent   of 41 

meaning   of 51 

Bailment: 

consignment    25 

pledge     25 

sale  distinguished  from 24 

"  sale  on  approval " 26,  49 

test  of    24 

Bargain  and  sale: 

essentials  of 3,  38 

possible,  when    7 

Bill  of  lading: 

reservation  of  title  by 59 

title,  evidence  of 59 

transfer  of,  after  notice  to  stop  goods 187 

transfer  of,  and  stoppage  in  transit 67 

transfer  of,  before  stoppage  of  goods 187 

transer  of,  for  value 187 

Bona  fide  purchaser: 

conditional    vendee,    from 75 

consideration,  valuable 69 

fraudulent  vendee,  from 65 

Bills  and  notes: 

(See  Negotiable  Paper.) 

Caveat  emptor: 

implied  warranties  and 99 

Chance: 

sale    of:    Scotch    law 13 

Chattel  mortgage: 

(See  Mortgage  of  Goods.) 

C.  0.  D.  shipment: 

title  passes   when 56 

Conditional  sale: 

lion  a  fide  purchaser  from  conditional  vendee 75 

chattel  mortgage  distinguished  from 30 

lease  considered  as 29 

recording    acts 76 

[237] 


238  INDEX. 

Consideration:  PAGE. 

price    17 

warranty,  in  88 

Consignment: 

bailment,   when    25 

sale,    when    26 

Contract  for  work  and  labor: 

contract  to  sell,  or 31 

Roman  law   31 

sale    distinguished    from 31 

Contract  to  sell: 

appropriation,  meaning  of 51 

carrier,  delivery  to 51 

conditional 4 

contract  for  work  and  labor 31 

same:  Roman  law 31 

defined    1 

goods   by   description 51 

sale  distinguished  from 2 

statute  of  frauds 119 

subject-matter    of 7 

same :  ceasing  to  exist 9 

title  passes   when 38 

Damages: 

action  for,  by  vendor 175 

contract  to  sell,  breach  of 200 

same:   measure  of 200 

measure  of:    vendor 17-> 

refusal  to  deliver  goods 197 

same:   measure  of 198 

rules  for  measure  of 176 

trover :   measure  of 198 

Delivery: 

appropriation  equivalent  to 41 

carrier,  to  56,  57 

C.   0.  D 56 

history  of   33 

place  of   45 

test  of  intention  to  pass  title 49 

title,  effect   on 38 

Equity: 

future  goods,  sale  of 14 

Estoppel: 

elements  of 69 


INDEX.  239 

Evidence:  PAGE. 

statute  of  frauds,  required  by 139 

Exchange: 

pleading   23 

Roman  law   23 

sale  distinguished  from 22 

statute  of  frauds ..  119 

Gift: 

defined    32 

delivery,  history  of 33 

equitable   title    34 

essential  elements 32 

revocable  and  irrevocable,  when 36 

savings  bank  deposits 35 

Lease: 

conditional  sale,  when 29 

sale  distinguished  from 28 

Lien: 

delivery  of  part  of  goods 181 

vendor's  179 

waiver  of  181 

Mortgage  of  goods: 

conditional  sale    30 

conditional  sale  distinguished  from 30 

equity  of  redemption 30 

Negotiable  paper: 

sale  of   136 

statute  of  frauds 136 

same :  bills  and  notes 166 

same :  checks    It54 

title,  transfer  of 64 

Pleading: 

exchange    23 

sale    23 

statute  of  frauds  as  defense 121 

Pledge: 

bailment,  a   25 

sale  distinguished  from 25 

Potential  existence: 

doctrine  of 10 

limitation  of  doctrine 13,  14 

sale,  title  passes  when 11 


240  INDEX. 

Price:  PAGE. 

action  for:  title  passed 169 

action  for :  title  not  passed 172 

certainty  of    18 

consideration,  as   the 17 

consists  of  17 

fluctuating  market    21 

in  general   17 

market  as  evidence  of  value 20 

market   at    place 21 

market  at  time 20 

reasonable,    what    is 20 

statute  of  frauds 138 

same :   reached  or  exceeded  when 138 

Recording  acts: 

conditional   sales    76 

Remedies: 

anticipatory  breach 177 

damages,  action  for,  by  vendor 175 

damages:  breach  of  contract  to  sell 200 

damages  of  vendor,  measure  of 175 

damages  for  refusal  to  deliver 197 

same:   measure  of 198 

damages :  rules  for  measure  of 176 

defrauded  vendor,  by 71 

in  general   169 

lien  after  part  delivery 181 

lien  of  vendor 179 

lien,  waiver  of 181 

price,  action  for :  title  not  passed 172 

same:  title  passed 169 

replevin    198 

resale:    American   law 190 

resale  at  profit 195 

resale  before  expiration  of  credit 192 

resale:    English  law 189 

resale,  notice  of 192 

resale  of  goods  in  transit 186 

resale:  sales  and  contracts  to  sell 191 

rescission :    America    196 

same:  England 196 

trover  198 

trover:    measure    of   damages 198 


INDEX.  241 

Remedies  —  continued :  PAGE. 

stoppage    in    transit 182 

same:  effect    of 188 

same:  essentials    of 184 

same:  insolvency  of  buyer 186 

same:  transit  of  goods 184 

vendee  v.  vendor,  for  breach  of  contract  to  sell 200 

vendee  v.  vendor,  in  general 197 

vendee  v.  vendor,  for  specific  performance 201 

vendee  v.  vendor:  when  title  has  passed 198 

warranty,  for  breach  of 1 12 

Replevin: 

action  of 198 

Sale: 

absolute   4 

auction    149 

bailment  distinguished  from 24 

bills  and  notes 136 

bulk,  goods  in 42 

cash   42 

chattel  mortgage  distinguished  from 30 

conditional  4 

consignment    25 

contract  for  work  and  labor,  or 31 

same:  Roman  law 31 

contract  to  sell  distinguished  from 2 

crops   132 

denned     1 

essential  elements   3,  21,  38 

exchange  and :  Roman  law 23 

exchange   distinguished  from 22 

fixtures     134 

ice    133 

involuntary    5 

lease  distinguished  from 28 

markets   overt    62 

pleading    23 

pledge  distinguished  from 25 


price 


17 


property   must  be    specified 37 

Roman  law    3 

"  sale  or  return  " 27,    49 

standing  trees 130 


2142  INDEX. 

Sale  —  continued :  PAGE. 

statute  of  frauds 119,  127 

stocks 136 

subject-matter,  existence  of 7 

subject-matter  existing:  Roman  law 9 

voluntary  5 

water    133 

"Sale  on  approval" 

bailment,  a 26,    49 

option  to  be  exercised  when 27 

title   passes  when 49 

«  Sale  or  return  " 

option  to  be  exercised  when 27 

statute  of  frauds 160 

title   passes   when 49 

Specific  performance: 

vendee  v.  vendor 201 

Statute  of  frauds: 

acceptance  and  receipt 150 

same:  by  agent 152 

same:  time  of 151 

acceptance,  established  how 152 

bills  and  notes,   sale   of 136 

contract  to  sell  within 119 

crops,  sale  of 132 

earnest    161 

effect  of  statute 124 

English  statute,  original 117 

evidences  of  things  in  action 160 

evidentiary  requirements,  in  general 139 

exchange  within  119 

fixtures,  sale  of 134 

"  for  price  of  " 138 

goods,  chattels,  etc 129 

ice,  sale   of 133 

interpretation   of   statute 117 

introduction  to  statute 117 

land,  sale  of 129 

memorandum 141 

consists  of  what 142 

contents  of 142 

signed  by  agent 148 

to  be  made  when 142 

to  be  signed 144 

to  be  signed  by  whom 145 


INDEX.  243 

Statute  of  frauds  —  continued:  PACK. 

New  York  statute  prior  to  September  1,  1911 118 

"  part  of  such  goods  " 159 

payment  of  part  of  purchase  money 162 

pleading  statute  as  defense 121 

price  fixed  by  statute 138 

price  reached  or  exceeded  when 138 

purchase  money,  in  general 163 

antecedent  debt  166 

bills  and  notes 166 

checks   164 

receipt    '. .  155 

Bale   by   auctioneer 149 

sale :   English  rule 127 

Massachusetts  rule   128 

New  York  rule 128 

sales  and  contracts  to  sell  included 118 

"  sale   or   return  " 160 

sale  under  statute 127 

standing  trees,   sale  of 130 

stocks,  sale  of 136 

third  persons,  unavailable  to 125 

Uniform  Sales  Act 118 

water,  sale  of 133 

writing,  formal  140 

Stoppage  in  transit: 

effect  of  .....  i 188 

essentials  of   184 

insolvency  of  buyer 186 

resale  of  goods  in  transit 186 

right  of  stoppage 182 

right,   origin   of 182 

transit  of  good? 184 

Subject-matter: 

bills  and  notes 136 

bulk,  sale  of . .... i ............ 42 

consists  of  what 6 

continued  existence :  contract  to  sell 9 

contract  to  sell 7 

crops   132 

existence  of:   sale 7 

Roman  law  9 

existing  goods 6 

fixtures  .           134 


INDEX. 

Subject  matter  —  continued:  PAGE. 

fungible  goods   7,  48 

future  goods   6 

future  goods,  contract  to  sell 16 

future  goods,  sale  of,  in  equity 14 

goods  to  be  manufactured 31 

ice    133 

land 129 

"  more  or  less  " 67 

potential  existence   10 

sale    7 

specific  goods  ceasing  to  exist 9 

specific  goods,  nothing  remaining  to  be  done 41 

standing  trees 130 

statute  of  frauds,  goods  under 129 

stocks  136 

water    133 

Title,  transfer  of: 

appropriation   41,  51 

bargain  and  sale 38 

bill  of  lading  as  evidence 59 

bill  of  lading,  consignee  in 67 

bona  fide  purchaser  from  fraudulent  vendee 65 

carrier,  delivery  to 57 

cash  sales    42 

C.  O.  D.  shipments 56 

conditional  sales,  recording  acts 76 

conditional    vendee    75 

consent  of  owner 65 

contract  to  sell 38 

contract  to  sell  by  description 51 

delivery,  effect  of 38 

designation  of  property 37 

fraud  by  impersonation 71 

fraudulent  vendee  65 

fungible  goods    48 

gift:    equitable   title 34 

goods  to  be  put  into  deliverable  state 43 

intention  a  question  of  fact 40 

intention,  delivery  indicative  of 49 

intention,  rules   of  construction 40 

intention  the  test 39 

markets   overt    62 

negotiable  paper    64 


INDEX.  245 

Title,  transfers  of  —  continued:  PAGE. 

nemo  dat  quod  non  habet 62 

place,  delivery  at 45 

possession   distinct  from 38 

possession  of  one  whose  business  is  to  sell 67 

potential  existence    11 

property  interchangeable  with 37 

quantity,  "  more  or  less  " 58 

quantity  ordered  to  be  delivered 57 

reservation  of  69 

reservation  of,  by  bill  of  lading 59 

"  sale  on  approval " 49 

sale  or  return 49 

specific  goods,  nothing  remaining  to  be  done 41 

weighing,  measuring  or  testing 45 

drover: 

action  for    198 

damages,  measure  of 198 

Uniform    Sales    Act 204 

Warranty: 

caveat  emptor  and  implied 99 

classification    84 

condition  confounded  with «. .  81 

consideration  for   88 

defined    78 

description,  sale  by 107 

development  of 78 

express,  defined    84 

express  excluding  implied 90 

fitness  for  special  use 103 

implied  and  caveat  emptor 99 

implied,  classification  of 93 

implied,  defined   91 

implied,  early  English  law 91 

intention  to  warrant 85 

latent  defect:  dealer 105 

same :   manufacturer 104 

merchantability    102 

misuse  of  word  "  warranty  " 80 

obvious  defects  87 

provisions    109 

quality  implied,  early  law 97 

remedy  for  breach  112 

representation    distinguished    from 82 


INDEX. 

Warranty  —  continued :  PAGE. 

sample,  sale  by 105 

specific  chattel  open  to  inspection 101 

sub-purchaser,  not  available  to 1 15 

title  implied   94 

tile,  implied  condition  under  English  Act 96 

title  implied,  seller  in  or  out  of  possession 95 

word  "  warrant  "  unnecessary 85 

written  contract  and  implied  warranty 89 

written  contract  and  oral  warranty 88 


44.  j. a.- 


LAW  LIBRARY 
UNIVERSITY  OF  CALIFORNIA 


